The year 2024 marked the first good year for General Motors’ electric cars. Alongside a net profit of $6 billion, the company has achieved a crucial breakthrough—its electric vehicle sales have finally turned profitable. This is a pivotal moment, as for the first time, GM is earning more from its EV production than it is spending.
Until now, electric vehicles have generally been a financial challenge for automakers. High fixed costs, including labor and raw materials, made profitability elusive. According to a report by Reuters, GM’s positive EV financials do not yet account for all associated expenses, such as the construction of new production lines. However, this remains a major step forward for the company.
The Tesla case study
To understand GM’s achievement, it helps to look at Tesla’s journey. Historically, EVs have been a long-term investment for manufacturers. High research and development expenses, along with the high cost of battery production—heavily reliant on supply chains linked to China—have hindered profitability. Tesla, for instance, did not report an annual profit until 2020. The key to turning a profit in EV manufacturing lies in scaling up production, which gradually lowers costs.
GM’s CEO, Mary Barra, shared more good news in a letter to shareholders: “We have doubled our electric vehicle market share thanks to increased production.” In 2024, GM delivered approximately 114,000 battery-powered vehicles in the U.S., securing a 13% share of the American zero-emissions market.
Looking ahead to 2025, GM plans to introduce new models, particularly under its luxury brand Cadillac, which will expand its lineup with the Escalade IQ, Optiq, and Vistiq SUVs. “We also aim to further improve EV profitability,” Barra added, emphasizing the company’s commitment to strengthening its foothold in the market.
