By Kalea Hall
DETROIT (Reuters) – General Motors on Tuesday posted fourth-quarter 2024 results and a 2025 earnings forecast ahead of Wall Street expectations as the U.S. automaker continued to see strong consumer demand for its pricey gasoline-powered trucks and SUVs.
Shares of the Detroit automaker rose 4.2% in premarket trading.
GM sold vehicles at an average price of $50,000 for the year, and executives see a 1% to 1.5% drop in North American pricing power and a modest decline in gas-powered vehicle volume in 2025, leaving it in a relatively strong position.
The company expects losses will narrow with its battery-powered vehicles, a reorganization of the China business will lead to improved results, and GM is ending robotaxi development at Cruise, its autonomous vehicle unit, which will lead to savings.
The automaker is projecting net income of $11.2 billion to $12.5 billion this year, topping analyst expectations of $10.8 billion, as calculated by LSEG.
The guidance does not account for tariffs, cuts to electric vehicle incentives and tax changes, which U.S. President Donald Trump has threatened to impose.
GM is one of the automakers most exposed to Trump’s plans on two important fronts: EVs, where it has made aggressive investments, and tariffs, because it has substantial manufacturing in Mexico and Canada, countries that Trump is targeting.
The Detroit carmaker does not break down its EV losses, but said in 2024 that revenue was higher than fixed costs including labor and material costs, a metric that it calls positive variable profitability. The figure does not include costs such as building assembly lines, but indicates financial progress in the EV rollout.
GM did not meet its goal of producing and wholesaling 200,000 EVs in North America in the year, instead ending up at 189,000 units wholesale, Chief Financial Officer Paul Jacobson said on a call with reporters. GM did reduce its EV inventory from 100 days at the end of the third quarter to 70 days.
GM previously had forecast EV operating losses would narrow by between $2 billion and $4 billion this year from undisclosed levels, although Jacobson told reporters the decline in losses was likely to be closer to the $2 billion end based on a wholesale goal of 300,000 for the year.
“We do think that we can grow our EV demand. We’re going to continue to see how EV adoption progresses in 2025,” Jacobson said.
GM’s fourth-quarter revenue of $47.7 billion surpassed analyst expectations of $43.9 billion. The automaker’s adjusted earnings per share of $1.92 in the quarter also exceeded analyst forecasts of $1.89 per share.
RESTRUCTURING CHARGES
GM reported pre-tax profit of $2.5 billion in the quarter but reported a $3 billion net loss, mostly because of $4 billion in restructuring charges in China where it lost $4.4 billion in the year. The China business did return to profitability before restructuring charges in the fourth quarter, Jacobson said.
GM and its Chinese joint venture partner are “implementing a wide range of restructuring initiatives that we’ve highlighted this year that will include reducing capacity to operate with utilization levels of about 80% or better,” Jacobson said, adding the restructuring could be completed without additional capital from GM.
GM partners with SAIC Motors in China to build Buick, Chevrolet and Cadillac vehicles.
GM’s adjusted earnings per share of $10.60 for the year surpassed the market expectation of $10.39. GM’s revenue of $187 billion beat estimates of $183 billion.
GM took a charge of $500 million in the fourth quarter for its Cruise autonomous business unit. The automaker announced in December its plans to halt funding for Cruise’s robotaxi program after investing $10 billion in it since 2016.
GM is instead focusing on providing autonomous technology for personal vehicles and is expecting to save $500 million this year on Cruise.
The results follow GM’s 2024 sales report of 2.7 million vehicles sold for the year, up 4% from 2023.
GM sold 114,432 EVs in the year, a 50% increase from 2023. The electrified versions of the mainstream Chevrolet Equinox and Blazer boosted GM’s EV sales, as did the Cadillac Lyriq with its sales surpassing gas-powered luxury SUVs.
(Reporting by Kalea Hall; Editing by Peter Henderson and Jamie Freed)
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