GM’s epically bad year still earned it $10 billion – but that’s not due to EV sales

Despite a truly terrible year for GM that involved plants being shut down for weeks due to a union strike, Bolt battery recalls, EV production problems, and the nightmare that keeps on giving that is Cruise, General Motors says it should tally up nearly $10 billion for 2023 – but we certainly don’t owe that to stellar EV sales.

GM released its annual forecast with fresh clarity, it says, about labor costs after the ink has dried on new union contracts in North America. Plus it has outlined its upcoming EV strategy, and how it plans to hurdle the fallout from Cruise, which already cost the company $2.7 billion last year.

Last November, GM said that it expected to reach nearly $10 billion, despite the $1.1 billion hit from the six-week UAW strike last year. Plus the Chevy Bolt EV battery recall costs $800 million in costs.

Still, CEO Mary Barra said that GM will “fully offset” those higher labor costs, with $2 billion worth of cuts part of the plan, meaning a lot of lost salaried jobs, reduced marketing spending, and “more efficient” manufacturing operation, according to Automotive News.

EV sales were rough last year: In 2023, GM delivered 75,883 BEVs in the US, about 2.9% of its total volume. Still, that’s a 93% bump from 2022. GM forecasts its total US auto industry sales to hit 16 million in 2024, but it has dropped its goal of making 400,000 EVs through mid-2024. Still, it is aiming to have 1 million EVs by 2025.

This year, the automaker expects adjusted earnings to be anywhere from $12 billion to $14 billion.

GM also says it hopes to turnaround its slow EV ramp-up, particularly around the issues with the Ultium battery architecture and supplier lag, Automotive News reports. GM sent teams up to help set up the assembly lines, and add module capacity to more EV plants, the report said.

Also, last month, Chevrolet stopped sales of its Chevy Blazy EV due to software issues.

General Motors said earlier this month that is finally ramping up production of its Cadillac all-electric Lyriq SUV this year. Barra also expects GM’s “competitive position” to improve, EV-wise, this year with the GMC Hummer EV, Chevrolet Silverado truck, and Blazer EV, although GM has a stop sale on the Blazer due to software issues.

city-dwellers’s Take

GM has some major hurdles ahead of it in its very immediate future. One, it needs a successful, problem-free launch of its Equinox EV, which starts at $35,000. Morningstar analyst David Whiston said that is its chance to jump ahead of Tesla in the only space Tesla doesn’t hold the reins – and that’s affordable EVs, reports Automotive News.

Dealing with Cruise is another top priority for GM, which just released its own investigation into what happened after a Cruise robotaxi struck and dragged a pedestrian about 20 feet rather than stopping in San Francisco. California’s Department of Motor Vehicles quickly pulled Cruise’s operating permit after the incident, with Cruise pausing all of its operations nationwide soon thereafter – it says it plans to restart in one city, but details aren’t yet available, and honestly, it’s hard to imagine that actually happening.

Meanwhile, a federal probe and independent investigations are looking into whether or not Cruise purposely withheld video footage of the incident from federal investigators. CEO and founder Kyle Vogt called it quits on November 19, followed by a mass layoff of 900 employees as well as nine top execs. Cruise is facing a potential $1.5 million in fines and additional sanctions over its failure to disclose details about the accident. So GM has its work cut out for it.

Photo credit: General Motors/Cadillac

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