GM expects 2025 earnings to be 'similar' to this year despite industry headwinds

DETROIT — General Motors expects its 2025 adjusted earnings to be in a "similar range" to the company's results this year, CFO Paul Jacobson said Tuesday during the company's investor day.

The Detroit automaker's targeted adjusted earnings before interest and taxes this year were between $13 billion and $15 billion, or $9.50 and $10.50 per share, up from previous guidance of $12.5 billion to $14.5 billion, or $9 and $10 per share, earlier this year.

Achieving its 2024 targets as well as similar earnings next year would be quite an accomplishment. Auto industry sales and consumer spending have been slowing and many on Wall Street expect that 2025 will be a significantly more challenging year for automakers.

Jacobson declined to provide specific financial targets until the company formally releases its 2025 financial guidance early next year.

He said the earnings, which many expect to be down for most automakers, will be assisted by $2 billion to $4 billion in better earnings for electric vehicles, as well as growing sales and profits of traditional gas-powered vehicles.

Jacobson said based on current assumptions, GM will have eight vehicles in the market that, on average, will be approximately nine points higher in EBIT margin than previous comparable models.

"We expect to see the benefits grow in the coming years as the organization continues to embrace more efficient ways to engineer, produce and sell our vehicles," Jacobson said.

He also said GM's capital spend also is expected to be consistent in 2025 with this year. GM's 2024 financial guidance includes anticipated capital spending of between $10.5 billion and $11.5 billion.

The EV tailwinds are split between savings from increases in volume and lower costs, including for raw materials and battery production.

GM has reduced its EV variable profit by more than 30 points year-over-year through the third quarter, Jacobson said.

GM CEO Mary Barra said Tuesday the automaker is on pace to produce and wholesale about 200,000 EVs for North America this year, achieving profitability on a production, or contribution-margin basis, by the end of this year. That guidance is down from a prior target of 200,00 to 250,000 EVs, which had been lowered from as high as 300,000 units.

Also assisting GM's earnings next year are expected reductions to fixed costs, which have come down by $2 billion over the past two years net of depreciation and amortization, as well as relatively stable demand and incentive spend by the automaker.

Other than the financial targets for next year, the automaker provided few significant updates at its investor day.

Shares of GM closed Tuesday essentially unchanged at $46.01. The stock remains up about 28% this year, but it has been under pressure of late due to several downgrades and price target adjustments by Wall Street analysts.