Detroit-Based Automaker Expects Steady Profits Despite Industry Slowdown
General Motors’ Chief Financial Officer, Paul Jacobson, announced on Tuesday that the company anticipates its 2025 adjusted earnings to remain in a similar range to this year’s results. This prediction comes despite expectations of a challenging year for automakers in 2025, with slowing auto industry sales and consumer spending.
The company’s targeted adjusted earnings before interest and taxes for 2024 are between $13 billion and $15 billion, or $9.50 and $10.50 per share, an increase from previous guidance. Achieving these targets would be a significant accomplishment, especially considering the anticipated industry slowdown.
Jacobson attributed the expected steady profits to several factors, including $2 billion to $4 billion in improved earnings from electric vehicles, growing sales and profits of traditional gas-powered vehicles, and reductions in fixed costs. The company has reduced its EV variable profit by over 30 points year-over-year through the third quarter, largely due to savings from increased volume and lower costs, including raw materials and battery production.
GM CEO Mary Barra announced that the company is on track to produce and wholesale around 200,000 EVs for North America in 2024, achieving profitability on a production basis by the end of this year. The company’s capital spending is also expected to remain consistent in 2025, with anticipated expenditures between $10.5 billion and $11.5 billion.
Despite the positive outlook, GM’s shares closed Tuesday essentially unchanged, remaining up about 28% this year. The stock has faced pressure in recent weeks due to downgrades and price target adjustments by Wall Street analysts.
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