GM’s ’23 Earnings Shake Off Strike, EV Slowdown

General Motors beat Wall Street 2023 earnings forecast despite EV and autonomous driving setbacks and a tough year in China, with the automaker predicting a good year for the industry.

David Kiley, Senior Editor

January 30, 2024

3 Min Read
2024 Chevrolet Equinox EV
GM sees affordable crossovers such as Chevrolet Equinox EV driving BEV growth this year.

General Motors reports lower pretax profit for the fourth quarter but beats Wall Street forecasts and gives investors a bullish outlook for 2024 – for both GM and the industry as a whole – and says it will buy back more of its shares.

The automaker’s year-end financial report posted numbers that largely shook off a year of lousy headlines and challenges – delayed electric-vehicle rollouts, slackening consumer demand for EVs, a safety debacle at its Cruise autonomous driving unit, poor results in China and a UAW strike and costly new contract.

The company’s internal-combustion-engine business – especially its pickup trucks and SUVs – continues to prop up the company.

CEO Mary Barra says in reporting year-end financials that the automaker will likely bring out more plug-in hybrid electric vehicles (PHEVs) because of heightened interest among customers and slower-than-expected build out of public charging.

For the fourth quarter, GM reported net income rose 5.2% to $2.1 billion on revenues of $43 billion. Adjusted pretax profit fell 54% to $1.8 billion. For the year, GM earned $12.4 billion in adjusted EBIT.

Based on demand for ICE vehicles, GM forecasts adjusted pretax profits in a range of $12 billion to $14 billion for 2024. The automaker says it is holding capital spending about flat this year at $10.7 billion.

Despite a lot of noise in the system about consumers’ reduced interest in EVs, GM’s Chief Financial Officer Paul Jacobson says EV sales are expected to climb to 10% of the total U.S. new-vehicle market this year, up from 7% in 2023 based on the introductions of more crossovers priced below $50,000.

“It’s true the pace of EV growth has slowed, which has created some uncertainty,” Chairman and CEO Mary Barra says, though she expects GM to become “variable profit positive in the second half of the year” based on GM’s current expectations for EV demand and production growth.

GM rolled back its goal of building 400,000 EVs through mid-2024, and now says it will sell at least 250,000 EVs in 2024, depending on customer demand. 

Despite higher costs associated with a landmark UAW contract, Barra says the automaker intends to return cash to shareholders including $12 billion in 2023 through a $10 billion share buyback and a 33% dividend increase. That, and the upbeat 2024 forecast, sent GM shares higher.

GM reported full-year 2023 revenue of $171.8 billion.

GM is cutting investment in its Cruise robo-taxi unit by $1 billion. Cruise paused operations of the unit after one of its self-driving cars dragged a woman down a San Francisco street. The U.S. Justice Department and the Securities and Exchange Commission are investigating the incident, but an outside law firm already has found fault with the automaker. GM says they are cooperating and are making changes based on the law firm’s findings.

Barra says the Cruise unit will be refocused and relaunched after losing $2.7 billion last year. The robo-taxi market is too important to walk away from. The robo-taxi opportunity is forecasted to reach $45 billion to $50 billion by 2030 as China and Europe embrace the business, while growth in the U.S. is expected to be slower but steady nonetheless.

GM’s China business is under pressure along with that of every other Western legacy automaker in that market as domestic manufacturers, as well as Tesla Motors, are gaining share as China adopts EVs faster than the U.S. Chinese automakers have a cost advantage in their home country and have proved to be ahead of Western companies in infotainment systems that give them a big competitive edge.

GM earned $446 million in China last year, a 34% decline.




About the Author(s)

David Kiley

Senior Editor, WardsAuto

David Kiley is an award winning journalist. Prior to joining WardsAuto, Kiley held senior editorial posts at USA Today, Businessweek, AOL Autos/Autoblog and Adweek, as well as being a contributor to Forbes, Fortune, Popular Mechanics and more.

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