General Motors said Tuesday that its profits in the final three months of 2023 were depressed by losses stemming from unsold electric vehicles and the cost of a 40-day strike at some of its U.S. plants.
The automaker, which has been betting on a rapid rise in sales of battery-powered models, earned $2.1 billion in the fourth quarter, it said, up from $2 billion a year earlier. GM's revenue rose about 10 percent to $171.8 billion.
“The pace of growth in electric vehicles has slowed, which has created some uncertainty,” the company's chief financial officer, Paul Jacobson, said in a conference call.
GM took a $1.6 billion charge related to unsold electric vehicles. The strike, by the United Automobile Workers union, cost the company $1.1 billion, and GM spent $800 million on a deal with LG Energy Solution, a battery supplier, that was linked to a massive recall of the electric Chevrolet Bolt. .
Several automakers, including Tesla and Ford Motor, have lowered prices in response to weaker-than-expected demand for battery-powered cars. GM has also had difficulty producing these types of vehicles in large quantities due to manufacturing problems with a new battery technology the company calls Ultium.
For the full year, GM said, it earned $10.1 billion, an increase of nearly 9 percent from 2022.
The automaker said it expected 2024 profits of between $9.8 billion and $11.2 billion. That range suggests GM could enjoy a big rise in profits or suffer a small decline, highlighting growing uncertainty about auto demand and the overall health of the auto industry. The company expects to spend about $1 billion less than last year on its Cruise self-driving division, which has suspended testing and commercial service of its fleet nationwide in response to growing safety concerns.
GM has also scaled back its electric vehicle ambitions. At one point, GM hoped to produce 400,000 electric vehicles by mid-2024, but consumers have not flocked to battery-powered cars as quickly as auto executives had hoped.
The company abandoned that production goal last year and delayed the introduction of some new electric models it has been developing. Last month, it told dealers to stop selling the electric version of the Chevy Blazer until GM engineers could fix a software problem that could cause certain features of the sport utility vehicle to stop working.
In the fourth quarter, GM sold more than 19,000 electric vehicles, but most were Bolts, which are no longer in production and use older battery technology. Only about a third of electric vehicles sold used newer battery packs produced at a factory in Ohio that GM owns in a joint venture with LG.
Jacobson said GM had “a lot of demand” for its electric vehicles but was being cautious about making more vehicles than customers were willing to buy. “We feel good about where we are,” he said.
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