General Motors’ financial results for 2024 include a big milestone for its growing electric vehicle lineup: actually making money on them.
The automaker announced today that in addition to net income of $6 billion last year, it is now “variable profit positive” on its EVs. Put simply, that means GM is now making more money on EVs than the fixed costs involved with making them such as labor and materials, as Reuters explained. While that figure does not account for certain other costs, like building assembly lines, it is a major step toward the auto industry’s long-sought goal of making EVs profitably and at scale.
EVs are generally unprofitable for nearly all automakers in their early stages due to the still-high costs of making batteries—the most expensive component on an EV, and one whose supply chain is still heavily tied to China—as well as the higher R&D costs involved. Tesla, for example, did not turn a full-year profit until 2020. But EVs are expected to become profitable for automakers over time as they ramp up their production scale, get battery costs down and simply get better at making them in new ways.
GM also reiterated 2024’s good news on the sales front. “We doubled our EV market share over the course of the year as we scaled production,” CEO Mary Barra said in a letter to GM shareholders. Last year, GM sold about 114,000 EVs in the U.S.; along with the Hyundai Motor Group’s brands, GM was the first automaker since Tesla to cross the 100,000 mark. GM now has about 13% of the U.S. EV market.
Last year, GM announced a big focus not just on electric sales volumes but on profitability as well. Now, this push to lower material costs, build up its in-house battery operation and other measures seem to be paying off. Barra also reiterated that new EV options are coming in 2025 as well, especially to Cadillac, which will add the Escalade IQ, Optiq and Vistiq SUVs to its lineup this year. “And we’re targeting further improvements in EV profitability as we continue to scale,” Barra said.
Nonetheless, the automaker faces headwinds, especially in 2025 with a very different set of policies coming from a new White House. GM’s profits still overwhelmingly come from its gas-powered trucks and SUVs and will for the foreseeable future. Its overall net income of $6 billion was far below earlier projections due to a major restructuring in China, where it is getting hammered by new, homegrown competitors. And GM, like any automaker, seems wary of losing the EV tax credits and other subsidies and incentives as President Trump’s agenda takes shape—not to mention tariffs on goods made in Mexico and Canada, which would have a direct impact on GM’s car prices.
“Of course, there is uncertainty over trade, tax, and environmental regulations and we have been proactive with Congress and the administration,” Barra said. “In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies. It’s clear that we share a lot of common ground, and we appreciate the dialogue.
And as the Detroit News noted, during a media call, GM CFO Paul Jacobson said that it produced about 189,000 EVs in 2024 and ended the year with a 70-day supply of them. While GM hopes to increase that number to 300,000 in 2025, it’s being cautious about demand: “We don’t want to overproduce to be able to just realize some cost benefits and then end up having to provide big incentives or big discounts to move that inventory… we want to be disciplined about that.”
Contact the author: patrick.george@insideevs.com
