Written by Joseph White
DETROIT (Reuters) – General Motors (GM) Chief Executive Mary Barra said on Tuesday that the No. 1 U.S. automaker will remain in the slow lane this year, similar to Tesla and other rivals. They will face the challenge of convincing investors that there is no such thing.
Tesla’s warning last week that it expects weak growth and continued pricing pressure over the next year weighed on shares of other automakers.
GM has already lowered its profit outlook for 2023, telling investors that a new U.S. contract with the United Auto Workers union will add $9.3 billion to costs.
A $10 billion share buyback and a 33% dividend increase announced in late November lifted the company’s stock price from a three-year low. But GM stock is down about 19% from its 52-week high and is flat so far in 2024.
Barra’s outlook for growth in North America and China, GM’s two major markets, was just one of the talking points Tuesday. Forecasters expect U.S. auto demand to grow at single-digit rates, increasing downward pressure on prices.
In China, GM’s 2023 sales were down 8.9% year-on-year, with demand for its Buick and Chevrolet brands dropping nearly 20% and 15%, respectively, as domestic automakers gained market share. .
Analysts will also be watching GM’s outlook for investments in electric vehicles and technology.
GM revealed last week that its Cruise Robotaxis division is under investigation by the U.S. Department of Justice, Securities and Exchange Commission and other regulators. Cruise Corp. has suspended operations after one of its cars dragged a pedestrian down a San Francisco street.
Barra said cruise technology could generate $50 billion in annual revenue by 2030, but the sector’s efforts to increase the number of revenue-generating vehicles have stalled.
Growth in US EV demand is showing signs of slowing. Ford has reduced production of its F-150 Lightning electric pickup truck to one shift and added a production shift at a plant that makes the Bronco internal combustion SUV.
Despite an uncertain market outlook, GM is looking to accelerate deliveries of a new generation of EVs in North America after struggling with bottlenecks in Ultium battery pack production last year.
GM sold just 12,859 Ultium EVs in 2023. Production of the company’s best-selling EV, the Chevrolet Bolt, has ended.
Barra told investors in October that Ultium vehicle production more than doubled in the third quarter.
(Reporting by Joe White; Editing by Chizu Nomiyama)