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GM reports 2024 pretax profit of $14.9 billion on strong truck sales
In its fourth-quarter and full-year results reported Tuesday, General Motors hinted at big bonus checks for salaried workers, record-setting profit-sharing checks for hourly workers and said it hit a milestone in making its electric vehicles “variable profit positive” — meaning the revenue from EVs now exceeds GM’s direct costs to make them.
For this year, the automaker, which produces the Chevrolet, Buick, GMC and Cadillac brands, has ambitions to build on that EV profitability, CEO Mary Barra said in a note to shareholders. Also of note, the automaker managed to stop the bleeding in its operations in China during the fourth quarter, posting $17 million in equity income after three quarters of losses that topped $347 million.
In its largest market, North America, Barra credited a broad vehicle portfolio and consistent sales for most of the profits. It reported fourth-quarter adjusted pretax profits of $2.5 billion, a 43% increase from the year-ago period. For the full year, GM said its adjusted pretax profits increased 21% to $14.9 billion.
“This combination of compelling vehicles in high volume and growing segments, strong execution anddiscipline led directly to record (pretax) adjusted, record adjusted automotive free cash flow and recordearnings per share-diluted adjusted,” Barra wrote in her regular letter to shareholders.
Ford Motor Co. reports its quarterly and year-end results on Feb. 5 and Stellantis reports its results on Feb. 26.
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Fourth quarter in a snapshot
GM reported that its fourth-quarter adjusted pretax profit soared 43% to $2.5 billion when compared with the same period in 2023, when GM was immersed in a six-week Stand Up Strike by the UAW that cost the automaker $900 million before taxes in the quarter and $1.1 billion for all of 2023.
Despite the pretax profit for the fourth quarter, after-tax net income came in as a loss due to a special charge. Last month, GM warned Wall Street that it would record a total of nearly $5 billion in non-cash charges against its fourth-quarter net income because of its struggling operations in China. GM said the non-cash special charge moved its total net income to a loss of $3 billion for the quarter compared with a gain of $2 billion a year earlier. But GM’s revenue for the quarter rose 11% to $48 billion.
GM reported global revenue of $47.7 billion, up 11% compared with $42.9 billion in the year-ago quarter. The results surpassed Wall Street expectations. The Zacks Consensus Estimate for the quarter’s revenue was estimated at $43.7 billion.
The full year in a snapshot
For all of 2024, GM’s global revenue rose 9% to $187 billion. GM’s annual net income slid 41% to $6 billion, compared with $10.1 billion in the year-ago period, mostly due to the special charge it took for its China operations.
GM said its adjusted pretax profits increased 21% to $14.9 billion, compared with $12.5 billion in 2023. GM took an earnings hit in 2023 beyond the strike: an $800 million charge to redo some contracts with battery supplier LG Energy and a $1.7 billion charge on its EV inventory related to losses expected on those vehicles.
GM’s lending arm, GM Financial, reported full-year revenue of $15.9 billion compared with $14.8 for 2023. Its adjusted pretax income was down slightly for the year at $2.97 billion, compared with $2.99 billion for 2023.
Barra’s take on the year and challenges ahead
Barra credited GM’s strong year to robust sales of full-size pickups, new and redesigned SUVs and an expanding portfolio of EVs, which helped GM double its EV share of the market to 12.5% since the first quarter. GM also focused on profitability by keeping incentives below the industry average and the average transaction price around $50,000.
Barra said global salaried employees have “earned strong performance bonuses” and U.S. hourly employees will get profit-sharing checks up to $14,500 as a result of GM’s earnings.
“As we look to the year ahead, we will continue to allocate capital consistently and in a balanced manner,and our vehicle portfolio will continue to get stronger,” Barra wrote. “For example, we will offer three stunning newCadillac EVs — the Escalade IQ, Optiq and Vistiq — and we’re targeting further improvements in EV profitability as we continue to scale.”
Barra said GM will see continued sales growth this year from the new gasoline-powered SUVs it launched last year. Those include the Chevrolet Equinox, Chevrolet Traverse and GMC Acadia. GM said it expects to report pretax profits for 2025 in the range of $13.7 billion to $15.7 billion, but that estimate does not include any impact from increased tariffs or other policy changes under the Trump Administration.
“Of course, there is uncertainty over trade, tax and environmental regulations, and we have been proactive with Congress and the administration,” Barra said. “In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies. It’s clear that we share a lot of common ground, and we appreciate the dialogue.”
Budgeting for bad
CFO Paul Jacobson told the media that the automaker expects new car prices to go down by 1% to 1.5% this year, good news for consumers, but bad news for Wall Street and profits.
But, he added, “We’re not seeing this at the moment, but we do believe it’s a prudent way to manage our budget and respond with agility if we need to.”
Asked by the Free Press if GM has been meeting with leaders of the UAW to discuss bringing more production to the United States to protect against Trump tariffs, Jacobson said, “We’re having conversations broadly with the administration, all our partners and our supply chain providers on what would we do if the world changes dramatically and we see an increase in tariffs permanently. We have a playbook. We are preparing for that and making sure we are prudent and we don’t overreact, but that we are consistent.”
Jacobson said GM has set up onshore battery plants as part of its joint ventures and it has done domestic mining as ways to bring more production onshore.
Jacobson said that GM produced about 189,000 EVs for 2024, just shy of its target of 200,000. But, he said, “We do think we can grow our EV demand. We’re going to see how EV demand progresses in 2025.” Jacobson said GM is targeting building 300,000 EVs this year.
Barra said that whatever happens on the political front, GM has a broad portfolio of gasoline and electric vehicles that are growing market share, and “we’ll be agile and execute as efficiently as possible.”
Tweaking Cruise and China
In December 2024, GM ended its longtime funding of Cruise autonomous taxis and said it will instead focus on advanced driver assistance systems for personal vehicles. GM had been spending about $2 billion a year supporting Cruise and never had a return on its investment after buying the company in 2016. GM expects this restructuring to lower its spending by more than $1 billion annually after the proposed plan is completed, which is expected in the first half of this year.
GM reported that Cruise had a pretax loss of $1.7 billion, an improvement over its loss of $2.7 billion for all of 2023.
GM leaders say the automaker has strong new-vehicle sales momentum going into this year after its U.S. sales rose 4% for all of 2024 compared with the year before, marking its best year-over-year gain since 2019. The automaker reported it sold more than 2.7 million new vehicles in the U.S., compared with 2.6 million new vehicles in 2023. In the quarter, GM sold 755,160 new vehicles, a 21% gain compared with 625,176 new cars sold in the year-before quarter.
GM spent much of 2024 fixing its business in China, its second most important market behind the United States. The automaker is in the midst of a massive restructuring of its operations in China to reduce costs, operate more efficiently and better match its vehicle portfolio to consumer demand there. GM has a 50-50 joint venture in China with SAIC Motor Corp. The joint venture is called Shanghai General Motors or SGM. SGM makes and sells Chevrolet, Buick and Cadillac vehicles in the Chinese market.
GM’s business has been under pressure there for several years now due to a rapid rise in electric vehicles, increased regulations and new domestic competitors entering the market. But its small profit of $17 million in the fourth quarter creates momentum for a better year ahead, Jacobson said.
“We spent the better part of 2024 working with our partner … the restricting charges represents the culmination of that,” Jacobson said referring to the total special charges of $5 billion. “Now we’re implementing that. We’ve always committed to getting it to profitability. We think we’ve done that and the fact that we were profitable, excluding the restructuring chargings, is a good testament to that. We have to continue watching that market and remain nimble going forward.”
For 2025, GM and its partners in China will reduce inventory, launch “new energy vehicles,” reduce costs and better match production to demand.
What the analysts say
Morningstar’s David Whiston commented ahead of GM’s results saying he expects new car prices to remain robust for GM, but launch costs for new Cadillac EVs and EV pickups could be a challenge.
“The fourth quarter 2023 strike should make for an easy year-over-year comparable,” Whiston told the Free Press. “They keep budgeting for a downward price move and it doesn’t happen. I think it will at least a little in 2025, but if they control costs, get help on volume and execute launches well, they should be fine, provided Trump tariffs don’t wreck everything.”
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Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
General Motors (GM) has reported a pretax profit of $14.9 billion for the year 2024, driven by strong sales in its truck segment. The company’s earnings were boosted by robust demand for its full-size pickup trucks, SUVs, and electric vehicles.
GM’s revenue for the year also saw a significant increase, reaching $145 billion, up from $130 billion in the previous year. The company’s strong performance in 2024 is a testament to its continued focus on innovation, quality, and customer satisfaction.
“We are pleased with our financial results for 2024, which reflect the strength of our product portfolio and the dedication of our employees,” said Mary Barra, CEO of General Motors. “Our trucks continue to be a driving force behind our success, and we are committed to delivering the best-in-class vehicles that our customers expect from us.”
GM’s strong financial performance in 2024 bodes well for the company’s future growth and continued success in the competitive automotive market. Investors and shareholders can look forward to continued positive results from GM as it continues to innovate and adapt to the changing landscape of the industry.
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