The company’s ambitious goals for electric vehicles and autonomous vehicles — and the money it is ready to put behind them — were underscored in GM’s first-quarter earnings report and accompanying analyst call on Tuesday. The first financial lesson from the first-quarter report was that profits were made despite supply restrictions. However, the call included other noteworthy remarks, such as a significant shift to its compensation-based strategy and a Cruise expenditure estimate, all of which are aimed at guaranteeing GM’s success in EVs and AVs.
The financial aspects come first. GM reported a $2.9 billion net income in the first quarter, down from $3.02 billion the year before. Revenue increased by 11% to $35.9 billion but fell short of analyst projections. GM, like other automakers across the world, is dealing with supply chain delays, chip shortages, and growing prices. Because of these challenges, GM’s car sales fell 20% in the first quarter compared to the same period last year.
Despite this, the manufacturer was able to narrow the earnings difference. At a conference with analysts on Tuesday, CFO Paul Jacobson stated, “We produced a very solid first quarter, with over 10% year over year sales growth, powered by healthy demand for our products, notably for our full-size trucks and SUVs.” A couple other things stuck out as well. The top three are listed below.
GM expects to sell 1 million electric vehicles in North America by 2025, thanks to electric pickup trucks and a new lineup of inexpensive battery-electric cars. The automaker’s largest growth potential in North America, according to CEO Mary Barra, is electric trucks, with the battery-electric version of the Chevrolet Silverado set to go into production early next year. However, that’s becoming a more competitive industry, with newcomer Rivian and Ford announcing their own new electric truck just hours before GM’s results call.
The all-electric Ford F-150 Lightning began manufacturing on Monday. Ford CEO Jim Farley said at a livestreamed event to commemorate the Lightning’s introduction on Tuesday that the firm aims to release a second electric truck shortly. GM also stated that it intends to focus on lower-cost electric vehicles. “Another area where we’re gaining a competitive edge is in cheap EVs,” Barra said, adding that the category “will be a big source of development for Chevrolet and Buick.” The Chevrolet Equinox EV, which is anticipated to hit the market in late 2023 for around $30,000, will “shatter the assumption that fashionable, practical, long-range EVs are luxury things.” In 2027, GM expects to add additional vehicles to its lineup thanks to a cooperation with Honda.
GM has said that a large portion of its long-term CEO remuneration would be tied to its electric vehicle targets. Barra did not elaborate on what “major portion” means, other than to state that the business has added criteria for electric vehicle volume in North America, EV launch schedule, and EV launch quality to its current financial indicators. Additional information will be released in GM’s proxy statement on April 29. Barra’s and the board’s intentions to dominate EV sales in North America are reflected in the change. Barra’s 2020 pay package was $23.7 million, including a $2 million salary, $13.1 million in stock awards, and a $3.78 million performance reward.