General Motors will address shareholder apprehensions on Tuesday regarding declining demand for electric vehicles (EVs) and the perceived peak demand for gasoline-powered trucks, which may pose challenges for the automaker.
CEO Mary Barra and her executive team are expected to reassure investors during the investor day event in Spring Hill, Tennessee, by emphasizing that profit margins for traditional internal combustion engine (ICE) vehicles have not yet peaked and that EV sales are steadily increasing.
Investors are also looking for more insights into GM’s restructuring efforts in China, along with updates on its Cruise autonomous vehicle operations, which have faced difficulties since an incident last fall involving one of its self-driving cars.
The slower-than-anticipated transition to EVs has prompted adjustments in plans from many automakers, including GM and its cross-town rival Ford. Consequently, GM’s messaging is anticipated to shift from aggressive growth targets to a more stability-oriented approach.
This marks a departure from previous years when GM aimed for ambitious goals to compete with Tesla, such as CEO Barra’s declaration in 2021 to double the company’s revenue to approximately $280 billion by 2030.
However, with EV demand falling short of expectations, executives are likely to reassure investors that profits from battery-powered vehicles are closer than anticipated. Additionally, the introduction of eight refreshed ICE models by the end of 2025 is expected to provide opportunities for margin improvement.
Rory Harvey, GM’s president of global markets, recently stated, “The third-quarter sales, which included strong gains on our EVs, were a positive platform leading into investor day,” highlighting the potential for growth despite current challenges.
In a bid to reduce EV costs, GM is exploring partnerships, including a recent non-binding memorandum of understanding with Hyundai (005380.KS) to leverage their combined strengths for cost reduction and faster delivery of a wider range of vehicles and technologies to customers.
A key focus of the investor day will be GM’s Ultium Cells battery technology, with investors expected to tour the battery and EV assembly operations at the company’s Tennessee plant.
This meeting marks the first since 2022, following a postponement last year due to the need to address a strike by the United Auto Workers union.
Source: Reuters
