General Motors (GM) is set to release its fourth-quarter 2024 earnings report, with analysts expecting strong financial performance despite challenges in its electric vehicle (EV) strategy and international operations. Wall Street anticipates adjusted earnings per share (EPS) of $1.89, a 52.4% jump compared to Q4 2023, and revenue of $43.93 billion, a 2.2% increase year-over-year. These projections reflect a continuation of GM’s resilience and strategic maneuvers in a competitive automotive market.
Financial performance and guidance
GM’s 2024 performance has been marked by robust sales and profitability. The company reported 4% growth in U.S. sales to 2.7 million vehicles, its highest figure since 2019, and a 21% year-over-year increase in Q4 sales. Strong demand for full-size pickups and SUVs, including models like the Chevrolet Tahoe and GMC Yukon, contributed significantly to this growth. The automaker also retained its leadership in the full-size SUV category for the 50th consecutive year.
For the full year, GM had previously updated its guidance multiple times, raising its adjusted EBIT range to $14 billion to $15 billion and adjusted EPS to $10.00–$10.50. Additionally, the company targeted automotive free cash flow of $12.5 billion to $13.5 billion, further demonstrating its ability to adapt to market dynamics. Investors will closely watch for GM’s 2025 outlook, particularly regarding its adjusted earnings and cash flow projections, as the company aims to build on this momentum.
EV growth and challenges
Electric vehicle sales were a bright spot for GM in 2024, with a 125% increase in Q4 alone, doubling its market share over the year. The success of models like the Chevrolet Equinox EV and Cadillac Lyriq underscored GM’s progress in the EV market. However, the company revised its 2024 EV production target to 200,000 units, the low end of its previous range, reflecting ongoing challenges in scaling production and reducing costs.
To address these hurdles, GM plans to cut EV production costs by $2 billion to $4 billion in 2025 and achieve positive variable profit margins for its EV lineup. CFO Paul Jacobson emphasized that these efforts would lead to improved profitability in the coming years. Despite these measures, GM faces stiff competition from Tesla and other automakers, with Tesla expected to launch its most affordable model yet in 2025.
Cruise restructuring and China operations
GM’s autonomous vehicle unit, Cruise, underwent significant restructuring in 2024. Following safety incidents and regulatory challenges, the company decided to wind down its robotaxi operations and integrate Cruise’s technologies into its in-house autonomous driving group. This strategic pivot aims to focus on consumer-facing applications like GM’s Super Cruise software for personal vehicles.
However, this transition came with financial costs. GM reported a $5 billion writedown related to its China business in Q4, including charges of $2.6 billion to $2.9 billion for its China joint ventures and additional equity losses from impairment charges. Despite these setbacks, GM managed to deliver 1.8 million vehicles in China in 2024, with Q4 deliveries increasing 40.6% quarter-on-quarter to nearly 600,000 units.
Strategic partnerships and initiatives
GM continued to strengthen its position through strategic collaborations and initiatives in 2024. The company expanded its public EV fast-charging network in partnership with EVgo and ChargePoint, surpassing 2,000 public fast-charging stalls. It also launched the GM Energy PowerBank, enhancing energy management solutions for consumers and businesses.
Additionally, GM invested in future technologies through ventures like its $10 million investment in Forge Nano and the closing of the Thacker Pass lithium mining joint venture with Lithium Americas. These moves aim to secure supply chains and support GM’s transition to electric mobility.
GM also reached a non-binding agreement with Hyundai Motor to collaborate on EV production and wholesaling. Furthermore, the automaker announced a partnership with Liberty Formula One to bring its Cadillac brand to the Formula 1 grid by 2026, showcasing its ambition to elevate its global profile.
Market and regulatory challenges
GM faces significant regulatory and market uncertainties heading into 2025. The Trump administration’s potential tariffs on products from Canada, Mexico, and China pose risks to the company’s profitability, particularly in its international operations. Additionally, shifting EV incentives and regulatory frameworks in key markets could impact GM’s ability to scale its electric vehicle production and sales.
Despite these challenges, analysts remain optimistic about GM’s prospects. Deutsche Bank recently upgraded GM’s stock to “Buy,” citing the company’s strategic adjustments, consistent execution, and aggressive share buyback program. GM’s stock outperformed many competitors in 2024, rising by 48%, and analysts expect this trend to continue in 2025.
However, GM’s EV growth trajectory remains a focal point for investors. The automaker’s recalibrated production targets and cost-cutting measures signal a pragmatic approach, but questions about long-term scalability and profitability persist. Rival Tesla’s planned entry-level EV model and growing competition from legacy automakers further heighten the stakes.
Featured image credit: General Motors
