General Motors (GM) and Ford are expected to report lower profits this week due to struggling electric vehicle (EV) sales and a significant cyberattack on a crucial dealership computer network. According to LSEG data, GM’s second-quarter net income is projected to drop by 7.7%, while Ford’s profit is anticipated to fall by 10%. GM will release its results on Tuesday, followed by Ford on Wednesday.
The cyberattack, which targeted CDK Global, caused a major outage in June, affecting over 15,000 U.S. car dealerships during a critical sales month. As reported by the Anderson Economic Group, this disruption is estimated to have cost dealers approximately $1 billion.
In addition to the cyberattack, both automakers face challenges in scaling their EV production and sales. The expected slowdown in EV growth hinders their ability to achieve the economies of scale necessary to drive down costs and reach profitability. Sam Fiorani, vice president at AutoForecast Solutions, noted that established car manufacturers face significant investments similar to start-ups, making immediate profits unrealistic.
Moreover, competition from Chinese EV makers and Tesla has intensified, contributing to a global price war and further straining GM’s and Ford’s EV ambitions. GM recently declined to reaffirm its goal of achieving one million units of EV production capacity in North America by the end of 2025. Similarly, Ford has shifted its focus from electric vehicles to producing larger, gasoline-powered versions of its F-Series pickup trucks at a Canadian plant originally designated for EVs. Ford also delayed the launch of its new three-row EVs from 2025 to 2027.
Nevertheless, both companies reported slower sales growth for the quarter earlier this month. Despite these challenges, analysts at Evercore ISI remain optimistic about GM, expecting the company to guide towards the upper end of its prior full-year forecast. Investors will be closely watching for updates on EV plans and insights into the impact of the CDK outage.
