GM Posts Strong Q4, Guidance for 2025

Key Points:

* Revenue up 11% to $47.70 billion
* Adjusted earnings per share (EPS) of $1.92, above estimates
* Adjusted earnings before interest and taxes (EBIT) increased 42.8% to $2.50 billion
* Full-year 2024 adjusted EBIT of $14.9 billion
* Lower low bound but higher upper bound for 2025 profit guidance of $13.7 billion to $15.7 billion
* Potential tariffs and loss of federal EV tax credits not modeled in guidance

Strong Performance, Challenges Ahead

General Motors (GM) continued its strong financial performance in Q4 2024, exceeding expectations. However, the automaker faces challenges in 2025, including the potential impact of new White House regulations on its electric vehicle (EV) business and manufacturing footprint.

Q4 and Full-Year Results

In Q4, GM reported a 21% increase in sales from a year ago and a 4% increase in 2024 to 2.7 million vehicles. Full-size pickup and SUV sales were key drivers of growth.

For full-year 2024, GM's adjusted EBIT reached $14.9 billion, driven by improvements in its EV business and China operations. The company doubled its EV market share and achieved variable profit positivity in the fourth quarter.

2025 Guidance

GM projects 2025 profit in the range of $13.7 billion to $15.7 billion, with a lower low bound but a higher upper bound than in 2024. However, this guidance does not incorporate potential tariffs or the loss of federal EV tax credits.

Challenges and Opportunities

Despite its strong performance, GM acknowledges headwinds, including modest wholesale volume and mix challenges and a potential pricing decline in North America.

The potential loss of the federal EV tax credit could impact EV demand, but GM believes it may gain market share due to the desirability of its EV portfolio.

EV Growth and Cost Reduction

While GM vehicles like the Cadillac Lyriq and Chevrolet Equinox EV have sold well, growth has not met initial projections. Despite achieving variable profit in Q4, GM sold less than its projected 200,000 EVs in 2024.

Nonetheless, GM targets 300,000 EV sales in 2025, which could provide an earnings tailwind of $2 billion to $4 billion. The company aims to reduce EV costs by $2 billion to $4 billion this year.