General Motors (GM) has revised its electric vehicle (EV) production target for 2024, lowering it from 200,000-300,000 units to 200,000-250,000 units due to slower-than-expected demand growth. Despite these adjustments, GM remains optimistic about achieving profitability in its EV segment by the end of the year.
Paul Jacobson, GM’s CFO, announced the revised targets during the Deutsche Bank Global Automotive Industry Conference. He stated that GM can still achieve “variable profit positive” on EVs within the new production range, likely by the fourth quarter of this year. Variable profit positive means that the revenue from EV sales exceeds the direct production costs, excluding corporate overheads.
GM’s decision is driven by current market conditions, where EV demand is not growing as rapidly as initially forecasted. Industry analysts predict EVs will make up about 10% of total auto sales this year, but GM anticipates it will be closer to 8%. Despite this, GM reported strong EV sales in May, with approximately 9,500 units sold.
Jacobson also revealed that GM will invest $850 million in its self-driving car subsidiary, Cruise, starting this month to aid its relaunch. This investment comes after Cruise halted operations following an incident in October 2023 that led to regulatory scrutiny and a workforce reduction.
Despite these setbacks, GM remains committed to Cruise’s mission and is expanding its on-road testing of self-driving cars to Houston, adding to its existing tests in Phoenix and Dallas. This testing phase will include safety drivers to ensure operational reliability.
GM’s revised production strategy also includes maintaining flexibility across its vehicle portfolio. The company aims to achieve profit parity between its EV and gasoline-powered vehicles by the decade’s end. This strategy involves introducing plug-in hybrid technology by 2027 to meet federal emissions regulations and support EV adoption.
Jacobson emphasized that GM manages costs effectively, even as it strives to ramp up EV production. GM ended the first quarter with 63 days of inventory and 59 days at the end of May, reflecting a strong supply chain position. The automaker is on track for a robust second-quarter performance, building on a first-quarter adjusted pretax profit of nearly $4 billion.
GM’s diverse retail EV portfolio this year includes models such as the GMC Hummer pickup and SUV, Cadillac Lyriq, Chevrolet Blazer EV, Chevrolet Equinox EV, Chevy Silverado EV RST, GMC Sierra EV, and the upcoming Cadillac Escalade IQ and Cadillac Celestiq.
As the EV market evolves, GM remains focused on executing its strategic goals, adapting production targets as necessary, and maintaining profitability across its vehicle lineup.
