General Motors expects its 2025 adjusted earnings to be similar to this year’s results. CFO Paul Jacobson said this during the company’s investor day. GM’s targeted adjusted earnings before interest and taxes this year are between $13 billion and $15 billion, or $9.50 and $10.50 per share.
Achieving its 2024 targets and aiming for similar earnings next year would be notable. Consumer spending has been slowing and many expect 2025 to be a more challenging year for automakers. Jacobson mentioned that GM’s earnings would be supported by $2 billion to $4 billion in improved earnings from electric vehicles and growing sales of traditional gas-powered vehicles.
Based on current assumptions, eight new vehicles in GM’s market will have, on average, higher EBIT margins compared to previous 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 stated.
gm forecasts steady earnings amidst challenges
GM’s capital expenditure for 2025 is expected to be consistent with 2024, between $10.5 billion and $11.5 billion. The EV tailwinds include savings from increased production volume and reduced costs for raw materials and battery production. Jacobson noted that GM had reduced its EV variable profit margin by more than 30 points year-over-year through the third quarter.
CEO Mary Barra emphasized that GM is on track to produce and wholesale about 200,000 EVs for North America in 2024, aiming for profitability on a contribution-margin basis by year-end. This guidance has been adjusted down from a previous target of 250,000 units, which itself was revised from as high as 300,000 units. GM’s earnings in 2025 are also expected to benefit from reductions in fixed costs, which have decreased by $2 billion over the past two years, net of depreciation and amortization, as well as stable demand and controlled incentive spending.
On Tuesday, shares of GM closed essentially unchanged at $46.01, though the stock has increased by about 28% this year. However, recent downgrades and price target adjustments by Wall Street analysts have impacted the stock.
