CEO Predicts GM’s EV Profitability Starting This Year

Currently, Tesla is the leading seller of electric vehicles (EVs) in the United States and has been generating profits solely from EV sales since 2021. Ford holds the position as the second-largest EV manufacturer in the country, yet it reported losses exceeding a billion dollars in the initial two quarters of this year for its Model e electric vehicle division. Other dedicated EV companies such as Rivian and Lucid are not generating profits from their vehicles and are relying on external investments to sustain their operations.

The demand for EVs continues to rise, though the growth rate is inconsistent in the U.S., prompting manufacturers to adjust their EV rollout strategies and include more hybrid options. The high cost of EVs remains a significant barrier; however, consumers can benefit from federal tax incentives of up to $7,500 to assist with purchases. These incentives are applicable only to domestically manufactured EVs, adhering to strict guidelines on vehicle pricing and battery material sourcing, designed to maintain competitiveness with China, which is producing more cost-effective EVs.

Few vehicles manufactured by GM, such as the Chevy Equinox and Blazer EV, currently qualify for these incentives, but the company is investing in efforts to reduce battery prices and secure these tax benefits for consumers. GM has announced plans to open a new battery cell development center in Warren, Michigan, set for 2027. Additionally, GM is constructing a $3.5 billion EV battery plant in Indiana in collaboration with Samsung SDI, alongside another facility in Lansing, Michigan with LG. GM and LG are also increasing output at existing plants in Spring Hill, Tennessee, and Warren, Ohio.

According to The New York Times, GM is projected to receive approximately $800 million in government subsidies for manufacturing EV batteries in the U.S., supported by the Biden administration’s Inflation Reduction Act.

In a bid to further reduce battery costs, GM intends to adopt lower-cost lithium iron phosphate (LFP) batteries for future EV models, similar to strategies employed by Tesla and Ford. While LFP battery chemistry generally results in a shorter driving range after a full charge compared to the more expensive nickel cobalt manganese (NCM) batteries installed in most current GM EVs, GM anticipates that its range impact will be minimal. Darryll Harrison, GM’s Vice President of Communications, indicated to The Verge that all GM EVs currently offer about 300 or more miles of range, with larger LFP vehicles expected to achieve “over 350 miles.”

Among the most affordable EVs available today is GM’s Chevy Equinox, priced below $30,000 after tax credits. Although it lacks Apple CarPlay, as does Tesla’s Model 3 sedan, which is priced around $35,000 after incentives, the Equinox remains a competitive option in the market.

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