General Motors is confident that its electric vehicle production will be “significantly higher” next year, CEO Mary Barra said yesterday. The news comes after several less-than-stellar (but growing) financial quarters where GM slowly increased production but remained well under 30,000 units per quarter since the beginning of the year.
“Frankly, we didn’t execute well this year as it relates to demonstrating our EV capability,” Barra said, quoted by Automotive News. “I am very confident with the EV portfolio that we have and the work that we’ve done to deliver significantly more Ultium-based products that customers, I think, will really appreciate.”
GM’s head honcho reiterated that it’s working to overcome a manufacturing constraint that has hampered the assembly of battery modules for its Ultium-based EVs like the Chevrolet Equinox EV, Chevrolet Silverado EV, and GMC Sierra EV.
In a surprise move, the company announced that it will boost its dividend by 33% next year and repurchase $10 billion worth of shares, making it its biggest-ever buyback plan, according to Bloomberg. These, along with two other points on the company’s investor-focused agenda–reinstating the 2023 earnings guide and cutting spending on the Cruise robotaxi venture–resulted in a roughly 10% bump in the share price.
At the same time, however, the increased financial burden following the signing of a new labor contract with representatives of the United Auto Workers union–which will cost GM $9.3 billion through 2028–made some analysts uneasy about the automaker’s ability to pull through.
Barra responded by saying that GM will offset the increased labor costs “completely” by sticking to its four-pillar strategy.
“Our strategy is clear,” Mary Barra said during an interview with Bloomberg. “It’s really based on four pillars of executing our strong internal-combustion engine program vehicles, we’re performing very well on the market and we see that we’re below the average incentives. I think that speaks to the strength of our internal combustion engine products,” Barra added.
“From an EV perspective, we have confidence in the portfolio we have. We’re a bit disappointed this year that we were constrained by the automation to build [battery] modules, so this is not something that is fundamentally an issue with Ultium, it was more a manufacturing automation issue that we’re working on and we’ll be out of it by the middle of next year, and making improvements every quarter,” General Motors’ head said.
Software and autonomy are also part of the company’s strategy to turn things around. The introduction of more affordable EVs such as the Equinox and next-gen Ultium-based Bolt is also expected to drive adoption.
GM “never saw EV adoption as a straight line,” Barra explained, adding that while the growth rate has decreased, it’s still growing.
