Despite a tumultuous year for General Motors, marked by plant closures due to a union strike, battery recalls, and manufacturing issues, the company expects to record a nearly $10 billion profit in 2023, largely unaffected by stellar electric vehicle (EV) sales.
General Motors has released its annual forecast, with a focus on labour costs once new union contracts are finalized in North America. With its forthcoming EV strategy outlined, the company is poised to overcome the setbacks incurred by Cruise’s hefty $2.7 billion price tag last year.
In November, General Motors predicted a profit of approximately $10 billion, despite a $1.1 billion impact from the six-week United Auto Workers (UAW) strike that occurred last year? The Chevrolet Bolt EV battery recall costs approximately $800 million.
Despite this, CEO Mary Barra revealed that GM will fully absorb the increased labor costs through a comprehensive plan, which includes $2 billion worth of cuts achieved by laying off non-essential salaried employees, reducing advertising expenditures, and implementing more environmentally sustainable manufacturing processes.
Electric vehicle (EV) gross sales have struggled in recent years; however, General Motors (GM) managed to deliver 75,883 battery-electric vehicles (BEVs) in the United States during 2023, accounting for approximately 2.9% of its overall volume. Despite this, last year’s figure saw a significant 93% increase. The General Motors Company anticipates that total US automotive industry gross sales will reach 16 million units by 2024. However, it’s likely that the company has indeed abandoned its goal of producing 400,000 electric vehicles by mid-2024. Despite this ambitious goal, the company remains committed to achieving 1 million electric vehicles on the road by 2025.
This year, the automaker anticipates adjusted earnings ranging from $12 billion to $14 billion.
General Motors aims to revitalize its slow electric vehicle production pace, particularly in areas where the Ultium battery architecture and supplier issues have hindered progress, according to research studies. General Motors dispatched teams to facilitate coordination and arrange meeting schedules, while also enhancing module capabilities for additional electric vehicle plants, according to the report.
Additionally, last month, Chevrolet halted sales of its Chevy Bolt EV due to software issues.
General Motors announced earlier this month that it is finally ramping up production of its Cadillac all-electric Lyriq SUV this year. Barra also anticipates GM’s “aggressive pace” to accelerate, electric-vehicle (EV) wise, this year with the GMC Hummer EV, Chevrolet Silverado truck, and Blazer EV; however, a software issue has prompted a stop-sale order on the latter.
Electrek’s Take
General Motors faces significant challenges ahead in the immediate future. GM seeks a seamless and financially successful debut for its Equinox EV, priced from $35,000. According to Morningstar analyst David Whiston, Ford is poised to surpass Tesla in a key area where Tesla does not currently excel: affordable electric vehicles.
GM’s top priority following the incident where a Cruise robotaxi struck and pulled a pedestrian 20 feet without stopping in San Francisco is to address the crisis, prompting an internal investigation into what went wrong. California’s Division of Motor Vehicles swiftly suspended Cruise’s operating permit following the incident, prompting the company to halt all nationwide operations immediately, with plans to resume services in one city pending availability, though it remains uncertain whether such a restart is feasible.
While a federal probe and independent investigations are underway to determine whether Tom Cruise intentionally withheld video evidence of the incident from authorities.
On November 19, CEO and founder Kyle Vogt resigned, followed by a mass layoff of 900 employees, including nine top executives. Cruise is facing potential penalties of up to $1.5 million and additional sanctions for allegedly failing to disclose crucial details regarding the incident. So General Motors has a significant workload ahead of it.
