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3 takeaways from GM’s Q1 earnings – TechCrunch


General Motors’ first-quarter earnings report and accompanying analyst call Tuesday highlight the company’s grand ambitions for electric and autonomous vehicles — and how much money the company is willing to shell out.

The original financial problem in first quarter report is a message of profit despite supply constraints. However, the call brought up other interesting comments, as well as a significant change to Cruise’s pay-based plan and spending forecast – all with a focus on ensuring the company’s success. GM in the field of electric vehicles and cars.

The first is the financial part. GM reported that net income fell to $2.9 billion in the first quarter from $3.02 billion a year earlier. Revenue rose 11% to $35.9 billion, but fell short of analyst expectations.

Like automakers around the world, GM faces pressures including supply chain disruptions, semiconductor shortages and rising inflation. Those headwinds pushed GM’s first-quarter vehicle sales down 20% from the same period last year. However, the automaker has managed to close the earnings gap.

“We delivered a very strong first quarter, including revenue growth of more than 10% year over year,” Chief Financial Officer Paul Jacobson said on a call with analysts on Tuesday. driven by strong demand for our products, especially for our trucks and full-size SUVs.”

A few other items stand out. Here are the top three.

Low cost EVs

GM is believing in electric pickups and a range of affordable battery-electric vehicles that will help it sell 1 million EVs in North America by 2025.

CEO Mary Barra says the automaker’s biggest growth opportunity in North America is in electric trucks, with a battery-powered version of the Chevrolet Silverado expected to begin production early next year. . Still, it’s an increasingly competitive segment with rivals from newcomer Rivian as well as Ford, which announced its own new electric truck hours before GM called for earnings.

Ford’s All-electric F-150 Lightning went into production on Monday. Ford CEO Jim Farley announced Tuesday at a livestreamed event to celebrate the launch of Lightning that the automaker plans to launch a second electric truck Early.

GM said it also plans to focus on lower-priced electric models.

“Another area where we are building a competitive advantage is affordable electric vehicles – a part of the market that our competitors are not focused on,” said Barra, adding that the segment This “will be a major source of growth for Chevrolet and Buick.”

The Chevrolet Equinox EV, priced at around $30,000, is expected by the end of 2023 to “break the notion that practical, stylish, long-range EVs are luxuries.” The partnership with Honda is expected to add more models to GM’s portfolio by 2027.

Compensation

GM said it plans to tie a significant portion of its long-term executive compensation to its electric vehicle goals. Barra doesn’t provide a breakdown of what the “major part” means except to say that the company added metrics for EV volume in North America, EV launch time, and EV launch quality. on existing financial measures.

Additional details will be announced April 29 in GM’s authorization statement.

The change represents Barra and its board’s ambitions to dominate electric vehicle sales in North America.

Barra’s 2020 compensation package is $23.7 million, which includes $2 million in salary, $13.1 million in stock bonuses, and a $3.78 million performance award.

Yacht

General Motors says it hopes to spend 2 billion dollars this year on its autonomous-driving Cruise subsidiary. While GM and Cruise have shared exactly what that attractive number will be used for, we can surmise that it ties into their commercialization plans.

Cruise also aims to begin mass production of its purpose-built Origin AV in 2023, and is trying to develop a robotaxi service in San Francisco.

Looking at the breakdown in the income statement, one can see an increase in losses compared to last year. Cruise’s loss was $325 million in the first quarter, compared with a loss of $229 million in the same period last year. But GM is betting that its investments in Cruise will pay off big. The automaker said it expects Cruise to bring in $50 billion in annual sales by the end of the decade.



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