General Motors (GM) will reduce its electric vehicle production targets for 2024 by at least 50,000 units. Instead of assembling 300,000 EVs, it now plans to build between 200,000 and 250,000.
The news was shared by GM CFO Paul Jacobson at Deutsche Bank's Global Automotive Industry Conference.
The decision is “100-percent demand driven”, he said, meaning that GM no longer is suffering from any battery module supply problems and is “on track” to produce 300,000 units this year.
This news comes as the company arrives with three new all-electric models on the market with the Chevrolet Equinox EV, Silverado EV and Blazer EV.
On the up side, GM expects that by the fourth quarter, its electric vehicles will show a profitable balance sheet, meaning that they will be able to cover the cost of their production. This happens when around 200,000 vehicles have been produced.
Added Jacobson, “We've been very consistent about building a platform and growing EVs off of that, and being able to do it in a way that meets customer expectations, and we can grow into profitability.”
“We don't want to end up in a position where we give out a production target and then we just blindly produce and end up with hundreds of thousands of vehicles in inventory because the market's just not there yet.”
There are signs of progress. With the supply end improving, GM recorded its best sales month ever this past May, with over 9,500 all-electric vehicles sold. The company expects second-quarter earnings to be better than the first quarter, when it reported net income of $3 billion USD on sales of $43 billion.
GM is scheduled to publish its second-quarter financial results on July 23.
Across the industry, despite the slowdown in the anticipated growth in demand for electric vehicles, some metrics show progress. According to S&P Global Mobility, electric vehicle market share in North America from January to April 2024 was 7.1 percent, compared with 6.9 percent for the same period last year.
That slowdown in growth is impossible to ignore, however. First-quarter sales of electric vehicles were up 2.6 percent this year over last, but down 15.2 percent compared to the fourth quarter of 2024, according to Cox Automotive data.
