General Motors (GM) is reassuring investors that there is no need to panic about decelerating demand for electric vehicles. The company plans to highlight that it could even improve its profits by 2025. This message contrasts with the ambitious goals set out by GM CEO Mary Barra in 2021, which included doubling revenue to $280 billion by 2030. Investors are concerned about automakers facing significant losses on EVs, plateauing sales of gas-engine vehicles, and increasing pressure from Chinese automakers.
The slower-than-anticipated transition to EVs has caused many automakers to adjust their plans. GM’s messaging at the upcoming investor day is expected to focus less on aggressive growth and more on stability. The company’s executives are expected to emphasize that profit margins have not peaked with internal combustion engine (ICE) vehicles and that EV profits are closer than investors might think. GM plans to launch eight refreshed SUV models between now and the end of 2025 to improve profit margins.
Investors have grown concerned about the broader auto market in the US, leading to GM’s stock plummeting despite posting upbeat earnings results and raising guidance. Shareholders want assurances that EV investments will not lead to continuous losses. They want GM to be restrained with capital and research and development spending on unproven technologies. Analysts have downgraded GM’s stock due to climbing US inventories, affordability concerns, and competition from China.
GM’s strengths in China and Cruise have become pain points that investors are seeking clarity on. Cruise faced controversy last year after an accident involving one of its robotaxis in San Francisco. Operations in China are no longer profitable without a restructuring, leading to a significant loss for GM in the region. Shareholders are looking for GM to bring down costs on its EVs as it competes with Tesla and Chinese rivals. The potential collaboration between GM and Hyundai aims to reduce costs and offer a wider range of vehicles and technologies to customers faster.
The upcoming investor event will focus on GM’s Ultium Cells battery technology, with tours of the Tennessee plant’s battery and EV assembly operations. GM aims to paint a positive picture of its ICE models and highlight upcoming SUV launches to improve profit margins. While investors are concerned about the future of EV investments and GM’s operations in China and Cruise, the company seeks to reassure them about its long-term profitability and growth potential. Shareholders are eager to hear about cost reduction strategies, potential collaborations, and advancements in battery technology at GM’s investor day.
