General Motors and Ford are on track to earn top profits in 2024, top executives say at a BankAmerica conference.
While inflation in some categories remains persistent in the U.S. economy, consumers are still queuing up for new wheels at a good clip. GM Chief Financial Officer Paul Jacobson says auto sales are “looking really strong” in March after a brisk February. Ford CFO John Lawler reaffirms prospects of profits of $10 billion-$12 billion for the year. "Things are looking pretty good" in the U.S. market, and prices are holding up better than expected, Lawler says.
The wild card going forward for both companies, as well as the broader industry, is how fast consumers will snap up battery-electric vehicles hitting the market to satisfy regulatory mandates, especially since at current sales rates each BEV loses thousands of dollars oneach transaction.
Demand for electric vehicles is "much lower than the industry expected," Lawler says. Ford has cut production plans for its BEVs and will "match capacity with demand," he says.
GM says it is rapidly developing a lower-cost, lighter-weight electric architecture on which it plans to develop BEVs priced under $50,000. Ford announced in February that it also was fast-tracking a lower-cost architecture.
GM’s Jacobson also expects the automaker to achieve its annualized production rate target of between 200,000 and 300,000 BEVs by the end of the year.
Both companies also are rapidly developing more hybrid and plug-in hybrid vehicles. GM for example, is working on a hybrid version of the Chevy Trailblazer, as well as several other models, according to GM sources. Ford already has a PHEV version of the Escape on the market, with more HEVs and PHEVs coming, including a Ford Maverick PHEV, which is built on the same platform as the Escape.
Both GM’s and Ford’s low-cost BEV architectures come in response to slowing demand for BEV prices topping $50,000, as well as the growth of Chinese automaker BYD which is rolling out sub-$22,000 BEVs outside of the U.S.
