General Motors said Tuesday that its profits in the final three months of 2023 were depressed by the cost of a 40-day strike at some of its U.S. plants and an accounting charge related to electric vehicles.
The automaker, which has been betting on a rapid rise in sales of battery-powered models, earned $2.1 billion in the fourth quarter, it said, up from $2 billion a year earlier. GM's revenue rose about 10 percent to $171.8 billion.
“The pace of growth in electric vehicles has slowed, which has created some uncertainty,” the company's chief financial officer, Paul Jacobson, said in a conference call.
The strike, by the United Automobile Workers union, cost the company $1.1 billion. GM also spent $800 million on a deal with LG Energy Solution, a battery supplier, related to a massive recall of the electric Chevrolet Bolt.
And the company took a $1.7 billion charge primarily to account for battery cells that were produced at such a high cost that they led GM to lose money on electric vehicles that were equipped with them. Jacobson said the cost of cells was falling and that GM's electric cars and trucks would be profitable in the second half of this year.
Several automakers, including Tesla and Ford Motor, have cut prices in response to weaker-than-expected demand for battery-powered cars. GM has also had difficulty producing these types of vehicles in large quantities due to manufacturing problems with a new battery technology the company calls Ultium.
For the full year, GM said, it earned $10.1 billion, an increase of nearly 2 percent from 2022. Based on the company's earnings in 2023, about 45,000 of its UAW workers will receive profit-sharing bonuses. up to $12,250, the company said.
The automaker said it expected 2024 profits of between $9.8 billion and $11.2 billion. That range suggests GM could enjoy a big rise in profits or suffer a small decline, highlighting growing uncertainty about auto demand and the overall health of the auto industry. The company expects to spend about $1 billion less than last year on its Cruise self-driving division, which has suspended testing and commercial service of its fleet nationwide in response to growing safety concerns.
GM has also scaled back its electric vehicle ambitions. At one point, GM hoped to produce 400,000 electric vehicles by mid-2024, but consumers have not flocked to battery-powered cars as quickly as auto executives had hoped.
The company abandoned that production goal last year and delayed the introduction of some new electric models it has been developing. Last month, it told dealers to stop selling the electric version of the Chevy Blazer until GM engineers could fix a software problem that could cause certain features of the sport utility vehicle to stop working.
In the fourth quarter, GM sold more than 19,000 electric vehicles, but most were Bolts, which are no longer in production and use older battery technology. Only about a third of the electric vehicles sold used the new Ultium battery packs produced at a factory in Ohio that GM owns in a joint venture with LG.
Jacobson said GM had “a lot of demand” for its electric vehicles but was being cautious about making more vehicles than customers were willing to buy. “We feel good about where we are,” he said.
GM Chief Executive Mary T. Barra said the company expected to produce between 200,000 and 300,000 electric vehicles with Ultium batteries in North America this year. She sold nearly 76,000 battery-powered cars and trucks in the United States in 2023.
Bara also said the automaker planned to sell plug-in hybrid vehicles in the coming years, something its dealers have been asking for amid slow sales of all-electric vehicles.
A plug-in hybrid combines a gasoline engine with an electric motor and a battery that can be charged with a plug. These vehicles can travel short distances on battery power alone. GM stopped manufacturing the Chevrolet Volt plug-in hybrid, which could travel up to 53 miles on electricity alone, in 2019.
“Deploying plug-in technology in strategic segments will deliver some of the environmental benefits of electric vehicles as the nation continues to build out its charging infrastructure,” Ms. Barra said.
GM has set a goal of ending its production of internal combustion vehicles by 2035 as part of an effort to reduce tailpipe emissions and combat climate change.
