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At General Motors (GM)’ investor day, the Detroit automaker made sure to tout its progress and enthusiasm for electric vehicles. But the company also made sure to remind investors that gasoline-powered cars are still a necessary part of its business.
GM on Tuesday said it expects to continue growing its sales and profits of internal combustion engine (ICE) vehicles in the coming years. Gas-powered vehicles made up about 95% of the automaker’s total 659,601 deliveries last quarter, according to the company. About 32,100 EVs were sold between July and September, a 60% year-over-year increase.
During his presentation Tuesday, CFO Paul Jacobson touted GM’s ICE and EV inventory, saying the company’s supply of EVs at dealerships was aligned with its goal of raising customer awareness. Jacobson, repeating a sentiment often mentioned by CEO Mary Barra, added that buying an EV is different than purchasing an ICE, noting that the “experience” of testing an electric car is instrumental in boosting dealer turn rates.
“We’re already seeing vehicle turn rates improve as customer demand is increasing along with our higher production,” Jacobson said. “But this is not a victory lap. Make no mistake, it’s actually quite the opposite. We expect the ICE industry to have a long tail, and it’s going to be a significant part of our future.”
Executives have previously said the company will need to keep advancing its ICE segment as the EV market continues to develop. Barra said Tuesday that GM thinks its EV losses peaked in 2024, with Jacobson noting that losses are expected to decline to $2 billion from $4 billion in 2025.
Barra said the company is on pace to produce around 200,000 EVs in North America this year, with profitability on a production basis this quarter; about 120,000 of those units have already been made. GM’s guidance had called for between 200,000 and 250,000 EVs, which had already been lowered from 300,000 units.
The automaker said it would build a new battery cell research lab at its technology campus in Warren, Michigan. GM’s next-generation batteries are projected to cut costs by about $6,000 per EV, according to Kurt Kelty, the executive overseeing battery development.
About a third of GM’s product capital budget is tied to ICE refreshes, of which eight SUVs are scheduled for in 2025. Each refresh is expected to boost profitability of those models.
Analyst feedback on Wednesday was mixed, with several analysts — like Berstein’s Daniel Roeska — saying that GM’s event didn’t provide enough details. For others, like Wedbush Securities’ Dan Ives, it reaffirmed their confidence that the company is “moving in the right direction” heading into the next year. J.P. Morgan (JPM) analysts reiterated their overweight ranking of GM stock, citing its core ICE business’s strength and the momentum of its EV business.
