Latest news with #PaulJacobson
Yahoo
23-05-2025
- Automotive
- Yahoo
General Motors makes surprising announcement about the price of its electric vehicles: 'We feel good'
Inside EVs reported that General Motors is not planning to raise prices due to the current administration's tariff policies. "We now expect pricing to be relatively consistent for the remainder of the year." GM CFO Paul Jacobson stated, according to the report. This announcement is surprising. Several of GM's EVs are assembled in Mexico, so the company is bracing for a huge cost impact in the billions of dollars. However, according to the Inside EVs report, GM is currently planning to hold steady on consumer pricing through the rest of the year. The article cites that the Equinox EV is currently the most affordable EV in the U.S. and that GM credits its Mexico build location for keeping costs so low. The low price, coupled with the vehicle's 300-plus mile range, has made Chevrolet the fastest-growing EV brand in the country. GM said it is expecting a $4 billion to $5 billion impact based on the current tariff policy, affecting imports from Korea, Mexico, and Canada. It plans to offset some of the costs with "self-help initiatives" and increased U.S. production of battery components, according to the report. Switching from a gas-powered vehicle to an EV has environmental and financial benefits. EVs do not produce air pollution that contributes to the warming of the planet, so it is a more eco-friendly transportation choice. EV owners can say goodbye to rising, fluctuating gas prices, saving money over time. Some EV skeptics cite the negative environmental effects that are a result of the pollution created during the battery manufacturing and charging process. While there is an environmental impact, the process is getting cleaner over time and has minimal negative effects in comparison to the 16.5 billion tons of fuel required for powering traditional gas vehicles. Roughly 30 million tons of minerals are dug up annually for the more affordable energy transition to EVs, and these minerals can often be reused, further reducing the environmental impact. Jacobson is confident that GM's wide EV lineup – from the $35,000 Equinox EV to the $130,000 Cadillac Escalade IQ – will help the company maintain pricing. "We feel good about where pricing is versus where we started the year, so we've assumed things remain constant from here," Jacobson said, according to Inside EVs. If you were going to purchase an EV, which of these factors would be most important to you? Cost Battery range Power and speed The way it looks Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Yahoo
23-05-2025
- Automotive
- Yahoo
General Motors makes surprising announcement about the price of its electric vehicles: 'We feel good'
Inside EVs reported that General Motors is not planning to raise prices due to the current administration's tariff policies. "We now expect pricing to be relatively consistent for the remainder of the year." GM CFO Paul Jacobson stated, according to the report. This announcement is surprising. Several of GM's EVs are assembled in Mexico, so the company is bracing for a huge cost impact in the billions of dollars. However, according to the Inside EVs report, GM is currently planning to hold steady on consumer pricing through the rest of the year. The article cites that the Equinox EV is currently the most affordable EV in the U.S. and that GM credits its Mexico build location for keeping costs so low. The low price, coupled with the vehicle's 300-plus mile range, has made Chevrolet the fastest-growing EV brand in the country. GM said it is expecting a $4 billion to $5 billion impact based on the current tariff policy, affecting imports from Korea, Mexico, and Canada. It plans to offset some of the costs with "self-help initiatives" and increased U.S. production of battery components, according to the report. Switching from a gas-powered vehicle to an EV has environmental and financial benefits. EVs do not produce air pollution that contributes to the warming of the planet, so it is a more eco-friendly transportation choice. EV owners can say goodbye to rising, fluctuating gas prices, saving money over time. Some EV skeptics cite the negative environmental effects that are a result of the pollution created during the battery manufacturing and charging process. While there is an environmental impact, the process is getting cleaner over time and has minimal negative effects in comparison to the 16.5 billion tons of fuel required for powering traditional gas vehicles. Roughly 30 million tons of minerals are dug up annually for the more affordable energy transition to EVs, and these minerals can often be reused, further reducing the environmental impact. Jacobson is confident that GM's wide EV lineup – from the $35,000 Equinox EV to the $130,000 Cadillac Escalade IQ – will help the company maintain pricing. "We feel good about where pricing is versus where we started the year, so we've assumed things remain constant from here," Jacobson said, according to Inside EVs. If you were going to purchase an EV, which of these factors would be most important to you? Cost Battery range Power and speed The way it looks Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet. Sign in to access your portfolio
E&E News
14-05-2025
- Automotive
- E&E News
General Motors pays off DOE loan for EV battery project
The Department of Energy announced Tuesday the early repayment of a loan it had made to a major electric vehicle battery project. Ultium Cells, a joint venture between General Motors and South Korea's LG Energy Solution, has paid off the loan it received to manufacture lithium-ion batteries in Ohio and Tennessee. The move means those projects are no longer subject to the onerous requirements and check-ins that come with federal loans. GM telegraphed the early repayment earlier this month, telling investors on a phone call that it would loan Ultium $1.8 billion to pay off the federal loan. That essentially shifted the debt to GM's balance sheet. Advertisement The joint venture's 'simplified capital structure will allow it to grow and evolve with even greater flexibility,' Paul Jacobson, GM's chief financial officer, said on the call.
Yahoo
13-05-2025
- Automotive
- Yahoo
GM Q1 Earnings Call: Management Focuses on Tariff Mitigation and Supply Chain Adaptation
Automotive manufacturer General Motors (NYSE:GM) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 2.3% year on year to $44.02 billion. Its non-GAAP profit of $2.77 per share was 3.9% above analysts' consensus estimates. Is now the time to buy GM? Find out in our full research report (it's free). Revenue: $44.02 billion vs analyst estimates of $42.85 billion (2.3% year-on-year growth, 2.7% beat) Adjusted EPS: $2.77 vs analyst estimates of $2.66 (3.9% beat) Adjusted EBITDA: $5.21 billion vs analyst estimates of $6.07 billion (11.8% margin, 14.2% miss) Operating Margin: 7.6%, down from 8.7% in the same quarter last year Free Cash Flow Margin: 9.6%, up from 0.9% in the same quarter last year Sales Volumes rose 1.8% year on year (3.7% in the same quarter last year) Market Capitalization: $47.7 billion General Motors' first-quarter results were shaped by ongoing policy changes and the company's efforts to adapt its global supply chain. On the earnings call, CEO Mary Barra highlighted actions taken to increase U.S. manufacturing capacity, including raising full-size pickup production and reducing reliance on imported materials. Management also pointed to continued growth in both internal combustion engine and electric vehicle segments, with notable market share gains for new SUV models and the Chevrolet Equinox EV. CFO Paul Jacobson attributed margin pressures to higher fixed costs and warranty expenses but emphasized disciplined pricing and inventory management as key supports for financial performance. Looking ahead, leadership outlined a cautious approach to 2025 guidance, citing a $4-5 billion tariff impact from recent U.S. policy changes. Management described plans to offset roughly 30% of this headwind through cost controls, supply chain realignment, and efforts to raise U.S. content in vehicles. Barra stated, "We are developing plans to further increase U.S. vehicle production," while also focusing EV investments on efficiency rather than portfolio expansion. The team underscored the importance of supply chain resilience, ongoing dialogue with policymakers, and disciplined capital allocation as the company navigates a complex policy and economic environment. General Motors' management cited several operational shifts and external factors as drivers of first-quarter performance and near-term strategy. The company is balancing increased U.S. manufacturing, supply chain adjustments, and evolving trade policies to protect margins and market share. Tariff Policy Adaptation: Management described swift actions to mitigate exposure to new U.S. tariffs, including increasing U.S. production and sourcing more components domestically. CEO Mary Barra noted the company raised full-size pickup output at its Fort Wayne plant and is working with suppliers to boost U.S. content and USMCA compliance. EV Production Moderation: To align with consumer demand, General Motors has slowed the pace of electric vehicle production. This approach is intended to avoid excess inventory and heavy discounting, with EV investments now targeted at cost reductions and efficiency instead of expanding the portfolio. Supply Chain Resilience: The company referenced its ability to quickly recover from an external supplier fire, limiting the disruption to vehicle output. Management also stressed long-term efforts to secure battery materials and reduce direct material spend from China, positioning for evolving global risks. Warranty and Cost Pressures: CFO Paul Jacobson acknowledged increased fixed costs and specific warranty expenses, such as addressing quality issues in certain engine models. However, management expects warranty costs to become a tailwind later in the year, aided by ongoing quality and cost initiatives. Market Share Gains: Management highlighted strong U.S. sales growth, with nearly two points of market share gained year-over-year. New product launches in SUVs and pickups, as well as increased EV sales, contributed to these gains and supported the company's disciplined pricing strategy. Management's outlook centers on adapting to new U.S. trade policies, strengthening the domestic supply chain, and maintaining pricing discipline in a competitive environment. Strategic investments in both ICE and EV segments are balanced with cost controls to address tariff impacts and shifting market demand. Tariff Mitigation Initiatives: General Motors plans to offset approximately 30% of tariff-related costs through supply chain adjustments, cost reduction targets, and increased U.S. content in its vehicles. The company is reviewing discretionary spending and working with suppliers to improve compliance with trade agreements. Disciplined EV Strategy: Management will moderate EV production to match consumer interest, focusing investments on cost efficiency and profitability rather than expanding the EV lineup. This approach is intended to avoid inventory build-up and maintain competitive margins. Capital Allocation and Cost Focus: The company reiterated its commitment to disciplined capital expenditures, maintaining capex within previously stated ranges despite the need for manufacturing shifts. Management intends to prioritize high-return investments while pausing additional share repurchases until greater operating certainty is achieved. Itay Michaeli (TD Cowen): Asked about the timeline for implementing tariff offsets and the pace of supply chain changes; management said mitigation will take time, with pricing, cost measures, and footprint adjustments progressing in parallel. Joe Spak (UBS): Questioned the breakdown of tariff mitigation and whether pricing assumptions include further increases; CFO Paul Jacobson clarified that current pricing levels are assumed to hold, and offsets come from operational changes and cost discipline. Emmanuel Rosner (Wolfe Research): Inquired about the sustainability of cost reductions and the potential for fixed cost cuts in EV investments; Mary Barra confirmed evaluations are ongoing but emphasized compliance with current regulatory requirements. Dan Levy (Barclays): Asked about managing vehicle volumes given a significant portion is assembled outside the U.S.; management highlighted excess U.S. capacity and flexibility to adjust production locations as needed. Daniel Roska (Bernstein): Raised concerns about suppliers passing on higher costs due to tariffs; Barra expressed confidence in collaborative supplier relationships and ongoing efforts to drive efficiency rather than margin expansion by suppliers. As we assess General Motors' execution in coming quarters, our analysts will watch (1) the pace and effectiveness of tariff mitigation and supply chain localization, (2) the ability to sustain pricing and manage inventory without resorting to incentives, and (3) continued market share gains, particularly from new SUV and EV launches. Progress on U.S. battery sourcing and regulatory developments will also be key markers of strategic success. General Motors currently trades at a forward P/E ratio of 4.6×. Should you load up, cash out, or stay put? The answer lies in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
09-05-2025
- Automotive
- Miami Herald
Ford CEO Jim Farley flags concerning behavior from new car buyers
Ford (F) decided Monday to suspend its guidance for the year due to the uncertainty around tariffs. The U.S. auto manufacturer praised President Donald Trump's tariffs, saying it "supports the administration's goal to strengthen the U.S. economy by growing manufacturing." However, it also said it expects tariffs to eat $1.5 billion of its EBITDA this year. Don't miss the move: Subscribe to TheStreet's free daily newsletter Ford had expected EBITDA between $7 billion and $8.5 billion for the year. The Blue Oval wasn't the only Detroit automaker to suspend its guidance. Rival General Motors did the same thing the week prior. Related: Ford makes a drastic decision in the face of tariff overhang GM also paused its $4 billion share buyback plan for now. "Because the original guidance didn't include the impact from tariffs, prior guidance can't be relied upon," said Paul Jacobson, the company's chief financial officer. GM had previously expected to earn between $11 and $12 per share this year. With so much chaos, there are few things Ford can count on, but one thing the company isn't worried about is the willingness of its potential customers to be flexible when purchasing their cars. The most common terms for auto loans are 24, 36, 48, 60, 78, and 84 months. The idea is that the longer the term of the loan, the lower your monthly payments, but the more money you end up paying over the life of the loan. Analysts on Ford's earnings call this week wondered how resilient Ford's customers would be should the company need to raise prices soon. The company's executives didn't seem too worried, however. "We see customers doing what they can to afford a new vehicle. I mean, we've seen 84-month financing increases as a share of our offers on the financing side. Natural levels are well within the bounds of the industry, but customers are doing what they need to to adjust for their payments," said CEO Jim Farley. Related: American car company takes drastic action in response to tariffs The company is seeing an increase in applications for longer-term financing instead of a drop in demand. But again, the company hedges, saying this could all change if the economy worsens in the second half of the year. Thanks to salaries that haven't risen to match inflation over the past five decades, the only way many Americans can own a car is to finance it. Fewer than 20% of new-car purchases were cash transactions, according to AutoTrader. So, over 80% of new car buyers are financing their purchases. The median cost of a new car in the United States is about $48,000. And while prices are still below their 2022 peak of $49,507, they have been trending upward. Since the median salary in the U.S. is $66,622, according to the latest Social Security data, it makes sense that 40% of Americans, or about 134 million people, hold automotive debt. More Automotive news: General Motors delivers surprising business updateFord reports surprising news amid Tesla turmoilApple creates clever way to stop car thieves U.S. auto-loan debt rose by $108 billion to $1.51 trillion in 2023, according to Experian. The average auto loan balance rose to $23,792 at the end of 2023. For now, Ford expects new car buyers to maintain demand in the face of rising prices by agreeing to longer loan terms. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
