GM To Reach EV Profitability By Year-End Despite Making Less EVs

With the EV adoption in the U.S. being slower than anticipated, General Motors GM revised this year’s expected EV sales and production, while being launching its newest EVs, including its new entry-level Chevrolet Equinox EV. Along with the recent relaunch of Chevrolet Blazer EV after software issues got sorted out, these two EVs, both built on GM’s Ultium EV platform, are crucial for the Detroit automaker’s EV growth. 

EV Demand Is Growing, But Slower Than Expected

Previously targeting production between 200,000 and 300,000, Chief Financial Officer Paul Jacobson stated the revised target for the full year is between 200,000 to 250,000 EVs. Some time ago, GM once expected to make as many as 400,000 EVs by mid 2024. However, GM is expecting its EV segment to become profitable on a production, or contribution-margin basis once it makes 200,000 EVs, therefore, it expects to reach this milestone in the fourth quarter. On June 4th, GM CEO Mary Barra clearly stated that GM remains committed to EVs, despite the mass industry slowdown, with May being the automaker’s best EV sales month ever in North America. Even better days seem to be ahead as at the end of May, as its EV lineup got bigger with the mass-market Chevrolet Equinox EV priced at $35,000. Barra also added that ultimately, the pace of GM’s EV development will be guided by customer demand. 

Meanwhile, Ford Motor F reported that its new vehicle sales surged 88% during the first five months of 2024, fueled by both EVs and hybrids that both grew about 65%. While the EV king, Tesla Inc TSLA continues to struggle with its aging lineup, GM and Ford are improving their positioning on the EV front. Their Detroit peer, Stellantis STLA is pursuing its EV goals despite a challenging macroeconomy and the EV slowdown. Back in March, Stellantis warned that a turbulent year ahead, much like Tesla CEO, Elon Musk. But, at the end of May, Stellantis CEO teased about a $25,000 all-electric Jeep EV coming to the U.S. very soon. Also in late May, Stellantis boss made sure to emphasize that Stellantis is not in a race to transition to EVs, but rather in a race to lower EV costs. On Thursday, Stellantis will have its Investor Day, where its leadership is expected to lay out the automaker’s strategy, along with addressing the Chinese competition, its ambitious targets and forthcoming products, and possibly more cost-reductions. 

Although the EV slowdown is slowing down an EV titan like Tesla, it’s turning out to be the best time for traditional automakers like GM and Ford who were struggling the keep up with the EV hype. Tesla kicked off 2024 with its first YoY sales drop in four years, suggesting it is in its flop era, while Ford began the year on a strong note and GM remained on track despite the discontinuation of the Chevy Bolt that weighted on EV sales. The first half of the year has almost passed and unlike Tesla, Ford and GM can tout their EV progress amid a gloomy and challenging macroenvironment.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.