New GMC trucks are shown on the sales floor of Hanlees Hilltop GMC on July 2, 2024 in Richmond, California.
Justin Sullivan | Getty Images
Detroit- General Motors The company expects adjusted earnings in 2025 to be “similar” to the company’s performance this year, Chief Financial Officer Paul Jacobson said at the company’s investor day on Tuesday.
The Detroit automaker targets 2024 adjusted EBIT of $13 billion to $15 billion, or $9.50 to $10.50 a share, up from $12.5 billion to $14.5 billion earlier this year, or $9.50 a share. $9 to $10 guidance.
Achieving the 2024 target and similar gains next year would be quite an achievement. Auto industry sales and consumer spending have been slowing, and many on Wall Street expect 2025 to be a more challenging year for automakers.
Jacobson declined to provide specific financial targets until the company formally releases 2025 financial guidance early next year.
He said many expected profits to fall for most automakers, but that a $2 billion to $4 billion boost in profits from electric vehicles, along with growing sales and profits from conventional gas-powered vehicles, would help profits.
Jacobson said that under current assumptions, GM would have eight vehicles on the market with EBIT margins that would average about nine percentage points higher than previous comparable models.
“We expect to see continued earnings growth in the coming years as the organization continues to adopt more efficient ways to design, produce and sell our vehicles,” Jacobson said.
GM’s capital expenditures in 2025 are also expected to remain consistent with this year, he said. GM’s 2024 financial guidance includes expected capital expenditures of between $10.5 billion and $11.5 billion.
The driving force for electric vehicles is divided into savings from increased production and reduced costs, including the cost of raw materials and battery production.
Jacobson said that as of the third quarter, GM’s electric vehicle variable profit increased by more than 30 percentage points year-on-year.
General Motors Chief Executive Mary Barra said on Tuesday that the automaker plans to produce and wholesale about 200,000 electric vehicles for North America by 2024 and become profitable on a volume or contribution margin basis by the end of this year. The guidance is down from a previous target of 200,000 to 250,000 electric vehicles, which was as high as 300,000.
Lower fixed costs, which have fallen by $2 billion after depreciation and amortization over the past two years, and relatively stable demand and incentive spending from the automaker are also expected to help GM’s earnings in 2025.
The automaker provided few major updates at its investor day other than financial targets for 2025.
General Motors shares closed little changed at $46.01 on Tuesday. The stock is still up about 28% this year, but has been under pressure recently amid multiple downgrades and price target changes by Wall Street analysts.
Correction: GM’s EV variable profit increased by more than 30 percentage points year-over-year through the third quarter. A previous version misstated this number.
About The Author
