General Motors Exceeds Expectations with Strong Q4 Results
Robust Demand for Gas-Powered Trucks and SUVs Drives Growth
General Motors has reported impressive fourth-quarter 2024 results, surpassing Wall Street expectations with a strong earnings forecast for 2025. The Detroit-based automaker saw shares rise 4.2% in premarket trading, driven by robust consumer demand for its high-priced gasoline-powered trucks and SUVs.
Average Vehicle Price Hits $50,000
GM’s average vehicle price for the year reached $50,000, with executives predicting a modest 1% to 1.5% decline in North American pricing power and a slight decrease in gas-powered vehicle volume in 2025. Despite this, the company remains in a strong position, with projected net income of $11.2 billion to $12.5 billion this year, exceeding analyst expectations.
Battery-Powered Vehicles Show Promise
While GM’s battery-powered vehicle losses are expected to narrow, the company did not meet its goal of producing and wholesaling 200,000 EVs in North America, ending the year at 189,000 units. However, the automaker reduced its EV inventory from 100 days to 70 days and expects to grow EV demand in 2025.
Restructuring Efforts Pay Off in China
GM reported a pre-tax profit of $2.5 billion in the quarter, despite a $3 billion net loss due to $4 billion in restructuring charges in China. The China business returned to profitability before restructuring charges in the fourth quarter, with GM and its joint venture partner implementing initiatives to reduce capacity and operate at utilization levels of about 80% or better.
Cruise Autonomous Unit Sees Shift in Focus
GM took a $500 million charge in the fourth quarter for its Cruise autonomous business unit, announcing plans to halt funding for the robotaxi program and instead focus on providing autonomous technology for personal vehicles. This shift is expected to save the company $500 million this year.
Strong Sales Performance
GM’s revenue of $187 billion beat estimates, with the company selling 2.7 million vehicles in 2024, a 4% increase from 2023. The automaker saw a 50% increase in EV sales, driven by the success of electrified versions of the Chevrolet Equinox and Blazer, as well as the Cadillac Lyriq.
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