General Motors (GM) has reported significant strides in its electric vehicle (EV) business, despite facing various challenges. The company's financial performance for 2024 highlighted both successes and setbacks. GM saw a substantial increase in EV sales towards the end of the year, with an impressive fourth-quarter surge. However, restructuring charges in China led to a net loss. Despite these hurdles, GM remains optimistic about achieving profitability in its EV segment by 2025, forecasting a decline in operating losses and increased market share.
GM demonstrated considerable progress in its EV sales trajectory during 2024. While it fell short of its target of producing and selling 200,000 electric vehicles in North America, the company managed to deliver 189,000 units. A notable highlight was the steady growth in quarterly sales, which climbed from 16,400 units in the first quarter to 44,000 units in the fourth quarter. This upward trend contributed to a significant increase in market share, rising from 6.5% to 12.5% in the US market. The company’s ability to ramp up production and meet growing demand underscores its commitment to expanding its presence in the EV sector.
The rise in sales volume also brought positive financial outcomes. By the end of 2024, GM had surpassed fixed costs associated with electric vehicle production, signaling a turning point in the profitability of this segment. Additionally, inventory levels dropped significantly, from 100 days' worth of stock at the end of September to just 70 days by year-end. This reduction indicates improved supply chain management and better alignment between production and consumer demand. CFO Paul Jacobson emphasized that these improvements were crucial in positioning GM for sustained growth in the EV market.
In spite of the positive developments in EV sales, GM faced several financial and trade-related challenges. The company reported a net loss of $3 billion for 2024, primarily due to restructuring charges in China totaling $4 billion. Despite this setback, GM’s fourth-quarter revenue reached $47.7 billion, surpassing analysts’ expectations. Pre-tax profits amounted to $2.5 billion, reflecting the company’s overall financial resilience. However, concerns over potential tariffs on raw materials and imports from Canada and Mexico added uncertainty to GM’s outlook.
To mitigate the impact of potential tariffs, GM is actively preparing by accelerating deliveries from its stock in Mexico and Canada to the US market. According to CFO Jacobson, securing as many vehicles as possible before any tariffs are imposed is a strategic move to minimize financial losses. Analysts have described GM’s forecast of a net profit between $11.2 and $11.5 billion in 2025 as optimistic, although slightly higher than the expected $10.8 billion. The company’s proactive approach to navigating trade challenges and improving operational efficiency positions it well for future success in the competitive EV landscape.