GM’s Barra Disappointed by EV Output but Restates Electric Plans

Jackson Wheeler
7 Min Read


  • Recent troubles have driven GM stock to about $28 per share, 15% lower than its 2010 IPO price, down 15% since the beginning of 2023, and well below Wall Street analysts’ “target” value of $42 per share.
  • Asked about high prices for the new Chevrolet Blazer (pictured above) and Equinox EVs, CEO Mary Barra said they are launching with high-content trim levels first, then settling down into popular-priced trims when production is at full pace.
  • Meanwhile, GM’s newly launched internal-combustion SUVs—the Traverse and Enclave—“are more profitable on a gross margin basis than the models they replace,” Barra says.

General Motors still is no Tesla. Not this year, at least.

CEO Mary Barra Wednesday said she is “disappointed” in GM’s failure to ramp up production of EVs and by the high-profile accidents and incidents in subsidiary Cruise’s San Francisco operations.

Barra announced two independent reviews of Cruise: one focused on its safety and technology, the other specifically investigating an October accident in which a hit-and-run driver of another car pushed a pedestrian under a Cruise robotaxi, which apparently reacted by running back and forth over her. San Francisco law firm Quinn Emanuel is conducting both independent reviews for GM.

These failures have driven GM stock to a low of about $28 per share, 15% lower than its 2010 IPO price, down 15% since the beginning of 2023, and well below Wall Street analysts’ “target” value of $42 per share.

“We didn’t execute well this year as it relates to demonstrating our EV capability and the capability of Ultium as it relates to the module manufacturing automation equipment that we had,” Barra said Wednesday, in a call with analysts.

The automaker also announced it would accelerate $10 billion in share repurchase (Wall Street-speak for buying back a chunk of outstanding shares to increase each share’s value) and a 33% increase in dividends to shareholders in 2024.

gm's cruise autonomous company's chevy bolt test vehicle

Tough times find GM’s Cruise division at a crossroads.

Cruise

This was Barra’s answer to a question from Adam Jonas, the Morgan Stanley analyst who has long been a champion of the world’s most valuable automaker by far, as measured by market capital: Tesla. About noon Wednesday, Tesla’s market cap was $786.3 billion. GM’s was worth more than $43 billion after its stock rallied in response to the share repurchase and dividend news, up nearly 10% to about $32.

Barra said she is “disappointed” in GM’s EV progress this year, “but optimistic about next year.” She is no longer talking about delivering 1 million EVs to North American customers in 2025, but she does expect increased production and continuing cost reduction in 2024, in part as the current Chevrolet Bolt, ending production by the end of this year, reappears on the Ultium platform for 2025.

CEO Barra predicts the Ultium Bolt will again be GM’s popular volume EV when it reappears for 2025.

Through the end of September, GM sold 56,414 EVs in the US, but 49,494 of those were Bolts on its old platform. Cadillac Lyriq had the next-highest number, at 5334 and GMC sold 1216 Hummers. Chevrolet sold 18 Silverado EVs and 19 Blazer EVs. BrightDrop sold 333 Zevo 600 delivery vans.

Barra was asked whether she was “comfortable” with the price of EVs, as sticker prices of the Chevrolet Blazer and Equinox EVs are substantially higher than their internal-combustion-engine counterparts.

The CEO said the EV versions are launching—like new ICE models—with high-content trim levels first, then settling down into popular-priced trims when production is at full pace.

Barra made it clear the Ultium Bolt will again be GM’s popular volume EV when it reappears for the 2025 model year. GM also expects “more robust” recharging infrastructure (read: Tesla’s plug-in standard) by 2025.

Barra did not name a new CEO for Cruise Wednesday. The last CEO, Kyle Vogt, who was considered central to Cruise’s fast expansion, resigned after the October pedestrian accident. Co-founder and senior executive Dan Kan left a day later. Mo Elshenawy, previously executive vice president of engineering, and GM chief counsel Craig Glidden now serve as Cruise co-presidents.

the brightdrop ev600 is an all electric light commercial vehicle purpose built for the delivery of goods and services

BrightDrop EV600 delivery van.

BrightDrop

GM also is making progress on EV cost reduction and will spend up to $11.5 billion on battery and joint-venture development, down very slightly from its previous guidance of up to $12 billion.

Earnings before income tax will be in the $11.7-$12.7 billion range, down from previous expectations of $12-$14 billion.

GM says it lost about $1.3 billion total during the United Auto Workers’ strike, which primarily affected production of the Chevy Colorado and GMC Canyon midsize pickup trucks and the Chevy Traverse and Buick Enclave SUVs.

However, “most of the $1.5 billion in added labor costs were anticipated in the previous guidance,” Chief Financial Officer Paul Jacobson said in today’s call.

While Barra continues to promise “an all-electric future” at GM, the company touted “improved ICE and EV profitability” Wednesday.

Its newly launched ICE SUVs—the Traverse and Enclave—“are more profitable on a gross margin basis than the models they replace.” All the better to help pay for that all-electric future.

Do you think General Motors’ all-in strategy for battery-electric vehicles will pay off in the long term? Please comment below.

Headshot of Todd Lassa

Contributing Editor

As a kid growing up in Metro Milwaukee, Todd Lassa impressed childhood friends with his ability to identify cars on the street by year, make, and model. But when American automakers put an end to yearly sheetmetal changes, Lassa turned his attention toward underpowered British sports cars with built-in oil leaks. After a varied early journalism career, he joined Autoweek, then worked in Motor Trend’s and Automobile’s Detroit bureaus, before escaping for Mountain Maryland with his wife, three dogs, three sports cars (only one of them British), and three bicycles. Lassa is founding editor of thehustings.news, which has nothing to do with cars.

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Jackson Wheeler is a skilled editor at Speedofdaily.com, specializing in automotive content. With a background in Journalism and Automotive Engineering, he combines his passion for cars with his writing expertise to deliver captivating articles. Jackson's deep knowledge of automotive technology and his racing experience make him a valuable asset to the team, providing readers with informative and engaging content.
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