GM Wants To Sell More EVs Because It Isn't Losing Money On Them Anymore
Good morning! It's Wednesday, January 29, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
Automakers are struggling with their electric vehicle lineups right now. Sales here in the U.S. aren't growing as fast as many hoped, the Trump administration is slashing incentives to go electric and automakers from Rivian to Ford are losing thousands of dollars on every electric car sold. General Motors isn't feeling the pinch quite so bad, it seems, and its latest financial results revealed that it's finally turning a profit on its battery-powered models.
General Motors sold more than 2.7 million vehicles in 2024 to help it rake in more than $14 billion in pre-tax profits. Of the cars sold over the past year, more than 100,000 of them were electric and the company actually managed to make a profit on each one sold, reports Business Insider:
The automaker reported its EVs were 'variable profit positive' in 2024, meaning that they earned more money than GM spent on manufacturing costs such as labor and parts.
GM doesn't break out its EV earnings like Ford does, so there are likely still other costs that it needs to overcome to achieve full EV profitability, including the cost of adding assembly lines. Still, the triumph over manufacturing costs marks an important milestone.
GM's EV sales were up by an impressive 50 percent in 2024, aided by launches like the new Equinox EV. As part of this rapid uptick, the automaker aimed to produce 200,000 EVs over the course of the year, but fell just short of that target and assembled 189,000 battery-powered cars, adds Business Insider.
Growth for the automaker doesn't look set to slow, and it is targeting a further 50 percent increase in production over the coming year. As such, GM aims to assemble 300,000 EVs in 2025, provided this fits with 'changes in demand and economic policy,' the site adds:
The automotive industry faces a lot of uncertainty under the Trump administration. The president has threatened tariffs on Canada and Mexico, which could be very costly for the sector. And when it comes to electric vehicles, Trump has floated the idea of pulling back on government incentives that have been critical for EV adoption in recent years.
In the coming year, GM will add new models to its all-electric range, including the Cadillac Vistiq, Escalade IQ and an all-new Chevrolet Bolt EV. Will cars like this and brand loyalty that GM enjoys be enough to make more Americans switch to an electric future? Only time will tell.
A little over a week in and Donald Trump's new team is still getting sworn in, with the senate set to vote on his pick for health secretary later today. Newly appointed U.S. transportation secretary, Sean Duffy, is getting comfortable with his new role, though, and has already set about scrapping rules brought in by the last administration.
Trump made no secret of his desire to shake up rules brought in to protect the planet by Joe Biden and his government. And by shake up, I mean tear to shreds, throw in the bin and then set the trash can on fire. Duffy is now making good on those promises and aims to rescind fuel efficiency rules brought in under the previous government, Automotive News reports:
In a Jan. 28 memo, Duffy directed the National Highway Traffic Safety Administration to reconsider rules covering the 2022 model year through the 2031 model year for cars and trucks.
The agency in June said it would hike Corporate Average Fuel Economy requirements to about 50.4 miles per gallon by 2031 from 39.1 mpg currently for light-duty vehicles.
Duffy, who took office late Jan. 28, also directed NHTSA to reconsider rules for heavy duty pickups and vans through 2035.
'Artificially high fuel economy standards designed to meet non-statutory policy goals, such as those NHTSA has promulgated in recent years, impose large costs that render many vehicle models unaffordable for the average American family,' Duffy's memo said. 'They also put coercive pressure on automakers to phase out production of various models of popular (internal combustion engine) vehicles.'
The rules brought in under Biden were designed to cut gasoline consumption by 64 billion gallons and slash carbon emissions from cars by up to 659 million metric tons. These rules aren't in line with Trump's aim of backtracking the switch to electric power and ramp up America's oil production.
The next target for the new government will no doubt be the impending ban on new gas-powered car sales, which will be implemented in states like California and New York.
The Trump administration's disdain towards electric vehicles has claimed its first victim, it seems. After months of will they, won't they, German automaker Volkswagen has confirmed that it won't bring the new ID 7 electric sedan to America. The automaker cited 'changing market conditions' for the cancelation of the new car.
The ID 7 launched in other international markets in 2023, but plans for a U.S. rollout were put on indefinite hold in May 2024, reports Automotive News. Now, VW has confirmed that indefinite really does mean forever and says it now has no plans to offer the car for sale in North America:
The ID7 was originally supposed to launch in the U.S. in the third quarter of 2024.
EV adoption rates in the U.S. have slowed across the industry, with consumers hesitant over pricing, charging infrastructure and range.
A VW spokesperson cited 'the ongoing challenging EV climate' for the decision.
'Electric vehicles continue to be a core part of Volkswagen's long-term product strategy, and new electric models will continue to be introduced for this market,' the spokesperson said.
The cancellation of the ID 7 means that VW's electric offering in the U.S. remains a little uninspired. It currently only markets the ID Buzz electric van and the ID 4 electric SUV over here, while markets like Europe also get the ID 3 hatch and the ID 7 as a sedan and electric wagon.
Maybe if companies actually started offering EVs that buyers want to swap their hard earned cash for, they may start seeing their electric car sales rise. Revolutionary thinking, I know.
Volkswagen deciding to kill off one of its EVs in one of its markets won't do much to hamper the rise in EV sales, however. After deliveries of battery powered cars surpassed 17 million units in 2024, experts are now predicting that this year could see deliveries of EVs hit 20 million for the first time.
Sales of electrified cars, including BEVs and plug-in hybrid models, are projected to increase by 17 percent over the course of 2024, reports Reuters. The rise in deliveries in places like China could see the total number of electrified cars surpass 20 million units:
EV sales in China will likely rise more than a previous forecast for 17% growth in 2025 and boost its market dominance thanks to the extension of subsidies, Rho Motion estimates. In 2024, they jumped by a record 40% to 11 million.
Sales of Chinese-made EVs will confirm 2024 trends in Latin America, where they reached a market share of over 80%, and will continue to rise in the Asia-Pacific region and emerging markets, the firm forecasts.
For Europe, it forecasts overall sales growth of 15% from the 3 million EVs sold last year.
All eyes will be on America over the coming months to see if changing attitudes towards EVs Stateside will hit these targets. With the Trump administration cutting support for battery-power wherever possible, it could be a tough ask for the country, but automakers like Rivian have previously argued that there's little the 'Home Alone 2' actor can do to stop the inevitable switch to electric power.
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