General Motors (GM) has reached a major milestone in its electric vehicle (EV) journey, reporting that its EV lineup is now “variable profit positive.” This means the automaker is generating more revenue from its EV sales than the direct costs associated with producing them, such as labor and materials.
While this metric does not account for broader expenses like factory construction, it signals a crucial step toward long-term profitability in GM’s electrification strategy. The company also posted a net income of $6 billion for 2024, highlighting its overall financial health despite challenges in key markets.
Scaling EV Production and Market Share Gains
GM has made substantial progress in ramping up its EV production, nearly doubling its market share in 2024. The company sold approximately 114,000 EVs in the U.S. last year, becoming one of the first automakers—besides Tesla—to surpass the 100,000 sales mark. GM now holds about 13% of the U.S. EV market, positioning itself as a serious contender in the industry.
CEO Mary Barra emphasized this growth in a letter to shareholders, stating, “We doubled our EV market share over the course of the year as we scaled production.” This expansion is a result of GM’s focus on reducing material costs, optimizing its in-house battery production, and enhancing overall efficiency in EV manufacturing.
New EV Models and Future Profitability Goals
Looking ahead, GM is betting on a stronger EV lineup to sustain its momentum. Cadillac will introduce three new electric SUVs—the Escalade IQ, Optiq, and Vistiq—later this year. These additions align with GM’s broader strategy to increase EV offerings across multiple segments and drive further improvements in profitability.
Barra reaffirmed the company’s dedication to long-term EV success, stating, “We’re targeting further improvements in EV profitability as we continue to scale.”
Challenges on the Horizon
Despite these positive developments, GM faces significant hurdles moving forward. The automaker’s core profits still stem largely from its gas-powered trucks and SUVs, which will continue to play a dominant role in its earnings for the foreseeable future. Additionally, GM’s net income of $6 billion fell short of expectations due to a major restructuring in China, where the company is facing intensified competition from domestic EV manufacturers.
Another looming challenge is the shifting regulatory landscape. With a new White House administration in 2025, the future of EV tax credits, subsidies, and trade policies remains uncertain. Tariffs on goods from Mexico and Canada could also impact GM’s pricing strategy and supply chain operations.
Barra acknowledged these concerns, stating, “Of course, there is uncertainty over trade, tax, and environmental regulations, and we have been proactive with Congress and the administration. In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies.”
EV Production Targets for 2025
GM produced approximately 189,000 EVs in 2024 and is targeting 300,000 units in 2025. However, CFO Paul Jacobson cautioned against overproduction, emphasizing the importance of maintaining healthy inventory levels without resorting to heavy discounts.
“We don’t want to overproduce just to realize some cost benefits and then end up having to provide big incentives or big discounts to move that inventory. We want to be disciplined about that,” Jacobson stated during a media call.