General Motors reported a $1.7 billion loss on Tuesday in its fourth quarter earnings call in the production and sale of its electric vehicle line, despite having positive net income growth in the quarter.
The automaker’s net income for the fourth quarter rose 5.2% year-over-year to $2.1 billion despite a reduction in revenue over that time frame of 0.3%, according to GM’s fourth quarter earnings report. The losses on EVs accompany a $1.1 billion total loss from a six-week-long strike by the United Auto Workers that partially halted operations, with the union gaining a new work contract that could raise labor costs in the coming year, according to the company’s investor earnings call.
“In our EV business, we expect our U.S. portfolio will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors,” Mary Barra, CEO of GM, said in the letter to shareholders Tuesday. “It’s true the pace of EV growth has slowed, which has created some uncertainty. But many third-party forecasts have U.S. EV deliveries rising from about 7% of the industry in 2023 to at least 10% in 2024, which would mean another year of record EV sales.”
General Motors just published 2024 guidance:
Net income $9.8B-$11.2B
Capex $10B-$11B (similar to Tesla’s $10bn 🤔)
Auto free cash flow $8B-$10B.
Share price reacts strongly positive: +6.5% pre-market in a largely flat market. pic.twitter.com/incz3COdF0
— AJ (@alojoh) January 30, 2024
The automaker noted that manufacturing and quality problems stymied the rollout of EVs in 2023, while demand from consumers in general has been weaker than expected, according to The Wall Street Journal. GM projects that EV sales will improve in the coming year as the company releases new models and scales production.
“What we don’t want to do is get into a position where we’re so focused on ramping up production that we’re not thinking about where the consumer is,” Paul Jacobson, CFO of GM, said in the investor call. “But so far, when you look across our models, we feel good at the way that they’re being received.”
GM did not immediately respond to a request to comment from the Daily Caller News Foundation.