General Motors was one of the major automakers to famously announce it was going all-in on electric vehicles in recent years. As reality has set in, and investor sentiment has changed, it’s now slowing its plan down. And that was just one of the pieces of news the automaker shared during its recent Q4 earnings call that has pleased shareholders.
From a product perspective, the most significant news is GM’s adjustment of its electrification strategy. The automaker clarifies that it hasn’t abandoned electric vehicles (EVs) entirely, considering its substantial investment in the Ultium program. However, CEO Mary Barra has announced that the company will increasingly lean on plug-in hybrid technology to meet emissions targets.
“Our forward plans include bringing our plug-in hybrid technology to select vehicles in North America,” Barra said, per Autonews. “GM remains committed to eliminating tailpipe emissions from our light-duty vehicles by 2035. But in the interim, deploying plug-in technology in strategic segments will deliver some of the environmental benefits of EVs as the nation continues to build its charging infrastructure.”
Read: GM Hits The Brake Delaying EV Drive Unit Production By Nine Months
Automakers are reeling after EV sales growth slowed in the fourth-quarter of 2023, suggesting they misjudged how quickly the market would grow. In addition, dealers have been asking GM for more hybrids, and it now plans to answer the call.
Unfortunately, the automaker has not offered a firm timeline on the introduction of a fresh batch of plug-in hybrid models, only saying that it would be timing the launches of the new vehicles to help it “comply with more stringent fuel economy and tailpipe emissions standards.” Barra pointed out that the models will be added to its American lineup in a “cost-efficient way because the technology is already in production in other markets.”
Predicts higher profits in 2024
Despite altering its vehicle strategy, GM is bullish about 2024. The company is forecasting an operating profit of $12 to $14 billion in 2024, which is higher than what analysts expected. It posted $12.4 billion in profit in 2023.
The automaker acknowledges that the upcoming year won’t be without its challenges. Normalizing production will likely mean it will be less of a seller’s market for new vehicles, potentially necessitating discounted pricing, reports the Wall Street Journal. However, this adjustment means that production of GM’s profit drivers, big internal combustion trucks and SUVs, is in full swing.
The Detroit automaker added that it sees growth opportunities in China, despite the fact that foreign automakers have been struggling there in recent years. Barra hinted that there is “a place to play,” in the market.
All of which is encouraging news for investors. The automaker’s bullish outlook and its shift to plug-in hybrids helped lift its stock price, which jumped as high as 9 percent in early trading after the release of Q4 earnings, according to Yahoo.
