GM Reports EV Revenues Exceeded the Fixed Costs of Manufacturing

General Motors remains deeply entrenched in the gasoline-powered vehicle market, but electric vehicles are becoming an increasingly significant component of its portfolio. In its fourth-quarter earnings report for 2024, the automaker revealed a milestone: for the first time, its EVs were generating positive financial results, in terms of being “variable profit positive.”

In a letter to shareholders, CEO Mary Barra described the EV segment as “variable profit positive,” meaning the revenue from electric vehicles now exceeds the variable costs of producing them, including labor and raw materials. However, this doesn’t account for fixed costs, such as the expenses of building manufacturing facilities. While the EV division is not yet profitable in a traditional sense, the company is clearly making strides, according to Reuters.

“We doubled our EV market share over the course of the year as we scaled production, and our portfolio became variable profit positive in the fourth quarter,” said Barra.

GM has been projecting a profitable EV business since 2022, with an expectation to be “solidly profitable” by 2025. Last year, Barra stated that GM would start making money on EVs by the close of 2024.

Key highlights for the quarter include an 85% increase in Chevy Equinox EV sales compared to the prior quarter, as well as the “best sales quarter ever” for the GMC Hummer EV.

While GM didn’t disclose specific EV losses, the company did announce it produced roughly 189,000 electric vehicles in North America last year and is aiming for about 300,000 in 2025.

Electric vehicles are still largely unprofitable for most automakers, due to the high costs associated with factory construction, battery production, and research and development.

EVinfo.net urges critics saying that EVs are unprofitable to research economies of scale. This concept says that profitability comes from reaching production at levels that are high enough to cover costs. This basic economic concept applies to any product produced and sold anywhere on the globe. GM will reach greater profitability in its EV business as its EV sales continue to rise, as America moves closer to mass adoption in 2025.

The company also mentioned it has begun delivering several new EV models, including the Cadillac Optiq, Escalade IQ, and Cadillac Vistiq in early 2025.

GM’s Strong Support of American Jobs Through Manufacturing Investments

Barra highlighted GM’s importance to America’s economy, as a leading employer providing many jobs for hard-working Americans. She addressed GM’s jobs leadership along with strong returns for GM investors in the shareholder letter.

Barra said: “Our employees and owners are all sharing in our success. I’m pleased to share that our global salaried team has earned strong performance bonuses, and our U.S. hourly employees once again earned the industry’s highest profit sharing, totaling more than $640 million. That’s a record payout of up to $14,500 per person, equal to more than two months of extra pay on average for our UAW-represented team. Investors in GM also earned a 50% total return and we ended the year with fewer than 1 billion shares outstanding, a goal we reached ahead of plan.”

During the last five years, no American automaker has invested more in battery manufacturing and infrastructure than GM. As recent sales statistics demonstrate, those investments are paying off. In 2024, GM’s U.S. EV sales jumped 50%, and its share of the domestic EV market doubled.

EVinfo.net Supports GM and Ford EVs

EVinfo.net urges you to support this proud and strong, all-American company, a cornerstone of our economy. We also urge strong support of Ford EVs. We proudly recommend all EVs offered by these two iconic American companies. We do not accept any compensation from any automaker, our support of GM and Ford is completely voluntary and transparent.