GM trims 2024 EV forecast amid slower-than-expected demand

GM’s 2024 Chevrolet Equinox EV during a media launch event for the vehicle in Detroit, May 16, 2024.

Michael Wayland / CNBC

DETROIT – General Motors is trimming its expected sales and production of all-electric vehicles this year, as U.S. adoption of EVs occurs slower than expected.

GM Chief Financial Officer Paul Jacobson said the company now expects production of 200,000 to 250,000 EVs this year, down from a previously announced range of 200,000 to 300,000. The company has recently said it will produce volume to match demand, which is growing, but slower than many had forecasted.

“So at the lower end of that, and I think it reflects the momentum that we have in the business,” Jacobson said Tuesday during a Deutsche Bank investor event.

Jacobson said GM expects EVs to make up 8% of U.S. sales industrywide this year. That’s lower than many others, which expect EVs to represent around 10% of industry sales in 2024.

GM expects its EVs to be profitable on a production, or contribution-margin basis, once it reaches production of 200,000 units. That milestone is still expected in the fourth quarter of this year, he said.

Jacobson said the automaker, which does not report monthly sales, sold more than 9,500 EVs in North America in May. Sales of GM’s all-electric vehicles remained miniscule during the first quarter. EV sales totaled 16,425 units, or 2.8% of the automaker’s overall sales during the period.

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GM, Ford and Stellantis shares in 2024.

The Detroit automaker is in the midst of launching its newest EVs, including its new entry-level Chevrolet Equinox EV. The vehicle will start at around $35,000 before any EV incentives, such as an up to $7,500 federal credit. GM also recently relaunched its Chevrolet Blazer EV after halting sales due to software issues.

The two new EVs, which share GM’s “Ultium” EV platform and technologies, are crucial for GM’s EV growth.

Separate from the EVs announcements, Jacobson said the company expects its second-quarter earnings to be better than the first three months of the year. He also said the automaker this month will invest $850 million into its troubled Cruise autonomous vehicle unit to help with operational cash.

The comments by Jacobson come after the company on Tuesday morning announced that a new $6 billion stock repurchase authorization has been approved by its board, largely backed by sales of its traditional gas-powered vehicles.

The new buyback authorization comes as an accelerated $10 billion share repurchase program announced in November 2023 is expected to be completed by the end of this month.

“We are very focused on the profitability of our [internal combustion engine] business, we’re growing and improving the profitability of our EV business and deploying our capital efficiently. This allows us to continue returning cash to shareholders,” Jacobson said in a release.