GM, one of the leading automakers in the world, has revised its sales and production expectations for electric vehicles (EVs) this year. The company initially projected a range of 200,000 to 300,000 EVs, but it has now adjusted that figure to 200,000 to 250,000. This adjustment reflects the slower-than-expected adoption of EVs in the United States.
During a recent investor event, GM’s Chief Financial Officer, Paul Jacobson, explained the decision. He stated that the lower production target reflects the current momentum in the business. Despite the slower adoption rate, Jacobson emphasized that demand for EVs is still growing. However, it is not growing as quickly as many had anticipated.
GM expects U.S. EV sales to account for around 8% of the entire industry. This projection is lower than what some experts had predicted. Many had anticipated that EV sales would make up approximately 10% of industry sales by 2024. However, GM remains optimistic about the profitability of its EVs. The company expects its EVs to start generating positive profits at around 200,000 units, a milestone it anticipates reaching in the second half of this year.
To achieve its goals in the EV market, GM is launching new models, including the Chevrolet Equinox EV and the relaunched Chevrolet Blazer EV. These vehicles are built on GM’s “Ultium” EV platform and incorporate advanced technologies. The success of these models will be crucial for GM’s growth in the EV sector.
In addition to adjusting its EV production targets, GM recently announced a new $6 billion stock repurchase authorization approved by its board. This buyback program will be supported by sales of traditional gas-powered vehicles. It comes following an accelerated $10 billion share repurchase program that is set to be completed by the end of this month.
Paul Jacobson emphasized that GM remains focused on the profitability of its internal combustion engine (ICE) business. The company is committed to improving the profitability of its EV business and deploying its capital efficiently. This strategy enables GM to continue returning cash to its shareholders.
In conclusion, GM has revised its EV production targets for 2024 due to slower-than-expected adoption rates in the U.S. market. The company remains optimistic about the future of EVs and expects its EVs to become profit-positive at around 200,000 units. GM is launching new models and investing in advanced technologies to drive its EV growth. Additionally, the company has announced a new stock repurchase program, reflecting its commitment to improving profitability and returning cash to shareholders.
