GM has announced it will place a greater emphasis on maximizing profits over sales volume as it eyes further cost-cutting measures through the end of the year. The automaker raised its full-year profit guidance this week, stating that it plans to trim an additional $1 billion in costs. The announcement follows the release of the automaker’s second-quarter 2023 earnings.
Highlights from GM’s Q2 2023 earnings report include $44.7 billion in revenue, $2.6 billion in net income attributable to stockholders, and EBIT-adjusted of $3.2 billion. Net income increased 52 percent year-over-year, while revenue increased 25 percent year-over-year. GM also updated its full-year guidance, forecasting $9.3 billion to $10.7 billion in full-year net income, up from $8.4 billion to $9.9 billion forecast prior. GM predicts net income of $7.15 to $8.15 per share for the year, an increase from $6.35 to $7.35 per share.
“There’s a lot of focus on winning with simplicity,” Jacobson said.
GM plans to spend between $11 billion and $12 billion in capital investments this year, about $1 billion less than the initial projection of $11 billion to $13 billion. The automaker did not specify which projects would be cut. In addition, Jacobson said that GM will expand cost-cutting efforts by $2 billion through the end of the 2024 calendar year, targeting an additional $1 billion in overhead, marketing, and other costs.
“We’re focused on profitability,” Jacobson said. “Our recent results demonstrate that we’re not sacrificing margin for volume. We will continue this strategy to help drive a fundamentally stronger company beyond 2023,” he said.
GM also announced that it would cover more of the costs associated with the Chevy Bolt EV battery recall. The General said the latest Q2 2023 results include “a $792 million charge for new commercial agreements” with South Korean battery maker LG Energy Solution.
“The charge reflects the conscious decision GM made during the Chevrolet Bolt EV and Bolt EUV recall to serve customers in ways that go beyond traditional remedies, and GM is taking new steps that will reduce its costs and improve EV margins over time,” GM states.