General Motors CFO: We will double EV production in the second half of the year
GM said it plans to double the number of electric vehicles it makes in the second half of 2023 after posting strong first quarter results.
After a surprisingly strong first quarter set against the backdrop of a sluggish economy, GM (GM) is ready to supercharge its EV production to take on Tesla (TSLA).
"Demand remained firm," GM CFO Paul Jacobson told Yahoo Finance Live (video above). Jacobson said GM saw sales strength in both lower-priced vehicle trims such as Chevy and higher-end plays like Cadillac.
Jacobson told Yahoo Finance GM will aim to "double" its EV production in the second half of this year as it continues to improve its battery capacity and introduce new models. The company is targeting the production of 50,000 EVs by the end of the first half of this year, he said.
GM stock fell more than 3% in afternoon trading on Tuesday. The company's ticker page was the third most active on Yahoo Finance.
The Earnings Rundown
Net Sales: +11.1% year over year to $39.98 billion vs. estimates for $39.24 billion
Diluted EPS: +5.7% year over year to $2.21 vs. estimates for $1.72
What else caught our attention
Raised full-year operating profit guidance to $11 billion-$13 billion compared to $10.5 billion-$12.5 billion previously.
Raised full-year free cash flow outlook to $5.5 billion-$7.5 billion compared to $5 billion-$7 billion previously.
Expects to produce 50,000 EVs in the first half of 2023 and "double" that number in the second half.
Expects to produce 400,000 EVs from 2022 to the first half of 2024.
Expects to reach a 1 million annual production mark for EVs in North America by 2025.
Expects to hit a $2 billion cost reduction goal for 2023.
Wall Street's initial reaction
"At first glance, another strong beat once again evidencing GM's resilience and strong execution, with 2023 guidance also raised," Citi analyst Itay Michaeli said.
"A very solid beat AND raise from GM will complicate bearish positioning/narrative in OEMs (GM still slight long positioning) as the company not only put up $3.8 billion adjusted EBIT (~$0.7 billion better-than-expected on 10.9% North America margin) but also raised the FY23 guide by $0.5 billion (now guiding $11-$13 billion EBIT vs. prior $10.5-$12.5 billion)," EvercoreISI's Chris McNally wrote.
"Bulls will point to GM’s track record of continued execution and measured pace of U.S. pricing normalization (all for ~5x PE) while Bears will say Q1 pricing strength is now in the 'rear-view mirror' given Tesla's recently started 'price war' (the firing shots coming from now mass market priced Tesla M3/Ys all while still considering their U.S. total market share is <5%," McNally added.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com
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