DETROIT – General Motors is pulling back its electric vehicle production target this year and adjusting the timing on its profit targets because demand for EVs is not growing at the pace initially expected.
GM CFO Paul Jacobson said Tuesday that GM would trim its targeted production of its new EVs in 2024 from between 200,000 and 300,000 to between 200,000 and 250,000.
Jacobson said GM still believes it can be “variable profit positive” on its EVs at the “low 200,000” production range. GM promised investors earlier this year that it would show variable profit in EVs by the second half of the year. Variable profit is when the revenue GM earns from selling the vehicle exceeds the direct cost of producing it. The calculation excludes corporate or “fixed” costs, measuring only the costs that go into the car and the revenue earned from the car directly.
“We think we can still do that in, probably Q4 more than the second half,” Jacobson said of achieving variable profit positive. “But we still think that’s an achievable goal going forward.”
Jacobson, who spoke Tuesday during the Deutsche Bank Global Automotive Industry Conference, also said that GM will invest $850 million in its self-driving car subsidiary, Cruise, starting this month to help relaunch it.
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