GM’s Barra Disappointed with 2023 EV Production but Restates ‘All-Electric Future’

• Recent troubles have driven GM stock to about $28 per share, 15% lower than its 2010 IPO price, down 15% since the beginning of 2023, and well below Wall Street analysts’ “target” value of $42 per share.

• Asked about high prices for the new Chevrolet Blazer (pictured above) and Equinox EVs, CEO Mary Barra said they are launching with high-content trim levels first, then settling down into popular-priced trims when production is at full pace.

• Meanwhile, GM’s newly launched internal-combustion SUVs—the Traverse and Enclave—“are more profitable on a gross margin basis than the models they replace,” Barra says.

General Motors still is no Tesla. Not this year, at least.

CEO Mary Barra Wednesday said she is “disappointed” in GM’s failure to ramp up production of EVs and by the high-profile accidents and incidents in subsidiary Cruise’s San Francisco operations.

Barra announced two independent reviews of Cruise: one focused on its safety and technology, the other specifically investigating an October accident in which a hit-and-run driver of another car pushed a pedestrian under a Cruise robotaxi, which apparently reacted by running back and forth over her. San Francisco law firm Quinn Emanuel is conducting both independent reviews for GM.

These failures have driven GM stock to a low of about $28 per share, 15% lower than its 2010 IPO price, down 15% since the beginning of 2023, and well below Wall Street analysts’ “target” value of $42 per share.

“We didn’t execute well this year as it relates to demonstrating our EV capability and the capability of Ultium as it relates to the module manufacturing automation equipment that we had,” Barra said Wednesday, in a call with analysts.

The automaker also announced it would accelerate $10 billion in share repurchase (Wall Street-speak for buying back a chunk of outstanding shares to increase each share’s value) and a 33% increase in dividends to shareholders in 2024.

This was Barra’s answer to a question from Adam Jonas, the Morgan Stanley analyst who has long been a champion of the world’s most valuable automaker by far, as measured by market capital: Tesla. About noon Wednesday, Tesla’s market cap was $786.3 billion. GM’s was worth more than $43 billion after its stock rallied in response to the share repurchase and dividend news, up nearly 10% to about $32.

Barra said she is “disappointed” in GM’s EV progress this year, “but optimistic about next year.” She is no longer talking about delivering 1 million EVs to North American customers in 2025, but she does expect increased production and continuing cost reduction in 2024, in part as the current Chevrolet Bolt, ending production by the end of this year, reappears on the Ultium platform for 2025.