It’s clearer than ever the engine driving General Motors Co. are cars and trucks powered by electric motors. That was the message from GM chair and CEO Mary Barra in discussing the company’s 2021 full year and fourth quarter financial results Tuesday.
In a conference call with financial analysts after the markets closed, Barra spoke of increased investments in the production and development of electric vehicles and battery, accelerating EV introductions and letting shareholders know all that spending means they won’t be receiving dividends for the time being.
Barra said planned introductions of several EV models are being hastened and the company also planned to resume production of the Chevrolet Bolt EV and Bolt EUV at some point, declaring, “we have set a target to deliver 400,000 EVs in North America over the course of 2022 and 2023.”
To meet expected increased EV demand, Barra said the company will continue to convert some plants producing internal combustion power vehicles to EVs and invest in a third plant to build electric trucks in North America and a fourth U.S. factory to produce battery cells to be announced the first half of this year.
Last week GM announced it will invest $7 billion in its home state of Michigan in part, to boost electric vehicle and battery production including building a new battery cell plant.
Cognizant electric vehicles fetch a price premium putting them out of consideration for many consumers, Barra revealed the automaker would, at some point, pivot from expensive pickup truck and SUV EVs to less expensive models, saying, “affordable EVs are part of the market.”
Barra dropped this news as the company reported net income of $10 billion in 2021 up from $6.4 billion the year before despite a tough fourth quarter where profits declined 39% from Q4 2020 to $1.7 billion in the face of sales suffering from thin inventories due to the lingering effects of the semiconductor shortage impairing production.
Indeed GM’s fourth quarter sales worldwide fell to 742,000 units from 1.01 million a year ago and declined for the full year to 2.85 million from 3.37 million in 2020, but sales of high-prices pickup trucks and SUVs moderated those declines.
But both Barra and GM chief financial officer Paul Jacobson painted positive outlooks for this year predicting attenuation of the semiconductor chip situation and increased profits.
Jacobson noted the chip shortage seem to abate during the fourth quarter and supply would improve throughout the year to the point where,“we expect total company volume to increase 25%-30% year-over-year with a majority of increase in second half of the year.”
He predicted industrywide U.S. sales for 2022 would come in around 16 million units as vehicle production slowly ramped up with an improved semiconductor chip supply.
Barra conveyed her confidence in a letter to shareholders, writing,“With an improving outlook for semiconductors in the U.S. and China, we expect our 2022 results will remain strong. In fact, we expect our EBIT-adjusted earnings to remain at or near record levels in the range of $13 billion — $15 billion, all while investing more year over year in our growth businesses like Cruise, BrightDrop and our rapidly accelerating portfolio of electric vehicles.”
Indeed the Cruise autonomous vehicle unit hit a milestone this week inviting the public in San Francisco to make a reservation on its website for rides in one of its electric robotaxis.
“This major milestone brings Cruise even closer to offering its first pay ride and
$50 billion in annual revenue by end of decade,” said Barra who recently took her first ride in a Cruise vehicle calling it the “highlight” of her career.