General Motors lowers 2024 electric vehicle production forecast due to lower-than-expected demand | Wilnesh News

Detroit – General Motors The company is cutting back on expected sales and production of all-electric vehicles this year as adoption of electric vehicles in the U.S. is slower than expected.

GM Chief Financial Officer Paul Jacobson said the company now expects to produce between 200,000 and 250,000 all-electric vehicles this year, down from a previously announced range of 200,000 to 300,000 vehicles. . The company recently said it would produce enough to meet demand, but demand is growing slower than expected.

“So I think it reflects the momentum of our business,” Jacobson said at a Deutsche Bank investor event on Tuesday.

Jacobson said General Motors expects electric vehicles to account for 8% of U.S. industry sales this year. That’s lower than forecasts by many other auto analysts, who expect electric vehicles to account for about 10% of the industry’s sales in 2024.

GM expects that once its electric vehicle production reaches 200,000 units, its electric vehicles will become profitable on a production or contribution margin basis. He said he still expects to achieve this milestone in the fourth quarter of this year.

The automaker, which does not report monthly sales, sold more than 9,500 electric vehicles in North America in May, Jacobson said. Sales of GM’s all-electric vehicles remained negligible in the first quarter. Sales of electric vehicles totaled 16,425 units, accounting for 2.8% of the automaker’s total sales during the same period.

The Detroit automaker is rolling out its latest electric vehicles, including a new entry-level Chevrolet Equinox EV. The car starts at about $35,000 before EV incentives, such as federal credits of up to $7,500. General Motors also recently relaunched the Chevrolet Blazer EV, which was discontinued due to software issues.

The two new electric vehicles share GM’s “Ultium” electric vehicle platform and technology, which is crucial to the growth of GM’s electric vehicles.

In addition to the electric vehicle announcement, Jacobson said the company expects second-quarter earnings to be better than the first three months of the year. He also said the automaker would invest $850 million this month in its troubled Cruise self-driving vehicle unit to help generate operating cash.

Jacobson’s comments came after the company announced Tuesday morning that its board had approved a new $6 billion stock repurchase authorization, boosted by sales of its traditional gasoline-powered vehicles.

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

“We are very focused on the profitability of our (internal combustion engine) business, and we are growing and improving the profitability of our electric vehicle business and deploying our capital efficiently. This allows us to continue to return cash to shareholders,” Jacobson said in a press release.

Correction: General Motors is cutting its 2024 electric vehicle production target to 200,000 to 250,000 vehicles.