General Motors Co (NYSE: GM) reported better-than-expected financial results Tuesday morning, but the stock is hitting the brakes after the company announced cost-cutting measures, suggesting its EV strategy could face a bumpy road ahead in the near term.
Following the print, CEO Mary Barra said the company’s focus on cost-cutting isn’t tied to its EV plans.
General Motors reported second-quarter revenue of $44.75 billion, which beat the consensus estimate of $42.64 billion. The automaker reported adjusted earnings of $1.91 per share, which beat estimates of $1.85 per share.
GM also raised its full-year 2023 guidance. The company boosted its profit outlook and said it now expects automotive free cash flow to be between $7 billion and $9 billion and capital expenditures to be between $11 billion and $12 billion.
GM said it’s taking new steps to reduce costs and improve EV margins over time.
Following the company’s quarterly results, Barra said the company’s EV ramp-up remains on track.
“Nothing has fundamentally changed,” the GM CEO said Tuesday on CNBC’s “Squawk On The Street.”
The automaker is still on track to produce 100,000 EVs in the second half of this year and ramp total EV production on a cumulative basis to 400,000 by the middle of 2024, she said, adding GM’s goals for 2030, especially on the EV side of the business, remain in place.
She acknowledged that problems with suppliers have created headwinds for GM’s Ultium battery platform, but the company is installing its own battery assembly stations to avoid the same issues in the future, she said.
“We’re doing both automated lines and manual lines … to not only deal with the situation we’re in now, but to make sure we stay ahead of module production as we have a ramp on our way to a million EVs in North America by 2025,” said Barra.
In order to reach its EV targets, GM is increasing its focus on producing vehicles with lower entry costs so consumers who are price sensitive can make the switch to electric, she said. The company is also focused on building out a robust charging network so that consumers who only own one vehicle can feel comfortable with it being electric, she added.
GM’s EVs that are currently in the market include the Chevrolet Bolt and the GMC HummerEV Truck.
Chevrolet’s EV that include the Silverado, Equinox, and Blazer are expected to enter the market in 2024 as it will be joined by the GMC Sierra EV and the GMC Hummer EV SUV.
The Chevrolet Blazer EV was featured in “Barbie” starring Margot Robbie, Ryan Gosling, and Will Ferrell. GM products were featured in the film for product placement.
Produced in association with Benzinga