Top executives from General Motors (GM) and Ford expressed optimism about the U.S. auto market and their profit projections, citing robust consumer demand. GM’s Chief Financial Officer, Paul Jacobson, noted strong auto sales in March, following a solid February, with incentives decreasing. Despite an anticipated price reduction, GM has seen no drop in prices, indicating sustained demand strength. Ford’s Chief Financial Officer, John Lawler, reiterated the company’s annual core profit outlook and highlighted better-than-expected price retention in the U.S. market.
However, Lawler acknowledged lower-than-expected demand for electric vehicles (EVs) and announced production cuts for Ford’s EV lineup to align with demand. He revealed plans for a new, cost-effective EV architecture, aiming to compete with industry leaders like China’s BYD and Tesla. This initiative is crucial for Ford’s EV unit, which is projected to incur significant losses this year. Lawler emphasized the need for Ford’s EV business to become profitable independently to attract long-term investment.
Despite challenges related to electrification expenses and EV demand uncertainties, both GM and Ford remain committed to their EV strategies. GM is on track to achieve its annualized production rate target for EVs by the end of the year and remains optimistic about its self-driving unit, Cruise. Ford plans to leverage demand for its hybrid models while developing a low-cost EV architecture to enhance its competitiveness in the EV market. In contrast, Stellantis recently announced layoffs as part of cost-cutting measures and efforts to ramp up its EV production. Overall, while legacy automakers navigate the complexities of transitioning to electrification, they continue to innovate and adapt to meet evolving market demands. Read More…
