- GM’s EV business became variable profit positive in Q4 2024, covering production costs but not factory or labor expenses.
- The company plans to sell 300,000 EVs in 2025, which could reduce losses but depends on maintaining consumer incentives.
- Profitable gas-powered vehicle sales continue to support GM’s finances while its EV division works toward full profitability.
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Did General Motors (GM) just crack the code on making electric vehicles profitable? Not exactly… but it did hit a financial turning point. For the first time, GM’s EV portfolio became “variable profit positive” in the last quarter of 2024. In simple terms, every EV the company sells, along with the battery manufacturing credits it earns, now covers the cost of production. But that figure does not include the massive investments in EV factories, research, or labor costs. So, while GM is moving in the right direction, the road to real profitability is still a long one.
GM Doubles EV Market Share and Grows Revenue by 9% in 2024
The company ended 2024 on a high note, reporting a 9% revenue increase and doubling its EV market share over the year. “We grew full-year revenue 9%, once again we led the U.S. market in total, retail, and fleet deliveries, we grew our market share, and we distanced ourselves from the industry’s pricing, incentive, and inventory pressures,” said GM CEO Mary Barra in her letter to shareholders.
EV production gains played a role in that success, as GM delivered over 114,000 EVs in 2024, a 50% jump from the previous year. The Chevrolet Equinox EV became the company’s top-selling electric model, offering up to 326 miles of range depending on the configuration. With increased production, GM is now leveraging scale to reduce per-unit costs, an important part of making its EV business stable for the long run.
Barra acknowledged this progress, stating, “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.” However, despite these gains, analysts caution that full profitability is still out of reach. GM is expected to have lost roughly $2.5 billion on the 189,000 EVs it sold last year, as the volume still isn’t enough to cover all fixed costs.
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GM Targets 300,000 EV Sales in 2025, but Policy Changes Could Disrupt Plans
For 2025, GM is setting its sights on 300,000 EV sales, a move that could help absorb some of the heavy costs still weighing on its electric lineup. The company expects $2 billion in EV-related cost savings if it reaches that goal, leaving it just $500 million shy of breaking even.
The challenge? GM’s projections rely on the current market staying the same, but that could change quickly with new federal policies. The company has not accounted for the possible repeal of the $7,500 consumer tax credit for EV buyers, which could make electric vehicles less appealing to some customers. There is also uncertainty around the battery production credits that GM and other automakers currently rely on. If those incentives are removed, GM’s EV costs could rise, making profitability harder to achieve.
“We have been proactive with Congress and the administration,” Barra stated. “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.”
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GM Balances EV Growth With Profitable Gas Models
One of GM’s biggest advantages in the EV race is that it isn’t betting everything on electric. The company still sells millions of profitable gas-powered vehicles each year, keeping its finances stable while the EV side of the business catches up. In 2024, new gasoline-powered SUVs like the Chevrolet Equinox, Chevrolet Traverse, and GMC Acadia contributed heavily to GM’s strong earnings.
Barra pointed out this balance in her letter: “Whatever happens on these fronts, we have a broad and deep portfolio of ICE vehicles and EVs that are both growing market share, and we’ll be agile and execute as efficiently as possible.” In other words, GM isn’t putting itself in a position where its entire future depends on EVs alone.
GM’s EV Business Makes Progress, but Profitability Remains Elusive
GM is proving that it can make money on each EV it builds, but making money on its entire EV business is another challenge altogether. With new models like the Cadillac Escalade IQ, Optiq, and Vistiq arriving this year, GM is expanding its premium electric lineup, which could improve margins further.
The question now is whether consumer demand will hold steady if incentives disappear. GM has already missed its EV targets before, previously planning for 200,000-300,000 EVs sold in 2024, but only delivering 189,000. If 2025’s projection of 300,000 EVs follows a similar trajectory, the break-even point could still be years away.
For now, GM’s success in the EV space depends on three key factors: scaling production, maintaining incentives, and balancing its profitable gas-powered lineup with growing EV sales. The company has made progress, but full profitability remains a work in progress.
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IMAGES: GENERAL MOTORS
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