GM said its annual capital expenditures will exceed $7 billion through at least 2023 as EV development and production progress.GM’s third-quarter net income surged 74 percent from a year earlier — when results were hampered by the UAW’s strike — and GM posted a record $4.4 billion adjusted profit in North America before interest and taxes.
GM’s results follow sizable third-quarter profits from Ford Motor Co. and Fiat Chrysler Automobiles, as the Detroit 3 rebounded from dismal results in the spring when sales dropped and the companies halted production for nearly two months.
The three automakers earned a total of more than $10 billion in North America during the latest quarter, with each achieving a double-digit margin in the region, after losing a combined $1 billion in the prior three months.
GM’s North American profits will help the automaker advance toward its electrification goals, Barra told investors. GM plans to have 20 EVs globally by 2023 and said EV development is moving more quickly than initially planned. GM developed the Hummer pickup, unveiled last month, in only 18 months. Detroit- Hamtramck Assembly, renamed Factory Zero in October, is being retooled to build at least five EVs by 2024, starting with the Hummer pickup in about a year. Also last month, GM said it would spend $2 billion to renovate its assembly plant in Spring Hill, Tenn., for EV production, starting with the Lyriq midsize crossover in 2022.
“We have to focus on what it takes to put vehicles on the road that are long term, durable and high quality — and what customers want,” said Barra. “We’re going to go hard at EVs. The North America performance allows us to do that.”
GM’s third quarter shows how quickly the automaker can rebound and preserve its balance sheet, said David Whiston, senior equity analyst for Morningstar.
“This shows that they can generate cash flow that can then be used to fund the transition to EVs,” he told Automotive News. “What they’ll need to do over the next few years is back up the claim that these EVs will be profitable right away.”
GM said it repaid $5.2 billion of the money it borrowed in March to weather the pandemic during the third quarter and $3.9 billion more in October.
The automaker expects to pay off the remaining debt by the end of the year. GM also put $200 million toward its restructuring plan during the third quarter, bringing total savings to $4 billion since 2018.
“This quarter provides a clear view of how we are transforming the company to lead in electrification,” Barra told reporters last week.
“We’re leveraging our iconic brands, the technology that we have, our manufacturing expertise and our scale, [which is] changing the way customers are viewing the company and how investors will start to assess the company.”