Strong sales of its existing pickup and SUV lines in Q4, despite decreased sales numbers due to the semiconductor shortage and supply chain constrictions, have GM positioned for a strong start to 2022 as the company works to electrify and automate its vehicle offerings.
“With an improving outlook for semiconductors in the U.S. and China, we expect our 2022 results will remain strong,” GM CEO Mary Barra wrote in a letter to shareholders Tuesday. “In fact, we expect our EBIT-adjusted earnings to remain at or near record levels in the range of $13 billion — $15 billion, all while investing more year over year in our growth businesses like Cruise, BrightDrop and our rapidly accelerating portfolio of electric vehicles.”
Barra points to strong demand for GM’s burgeoning line of EVs running on the Ultium battery platform — such as the currently available Hummer EV as well as upcoming Silverado, Equinox, Sierra and Lyriq EVs — with a portion of the company’s financial performance. GM’s Brightdrop EV6000 commercial vehicle is also seeing healthy interest from FedEx, Merchant’s Fleet and Walmart as green additions to their respective delivery and cargo fleets, the company reported Tuesday.
The Hummer EV itself has reportedly seen more than 59,000 paid reservations to date. “Not surprisingly, some of the first owners are very prominent figures in the sports and entertainment industries,” Barra said during Tuesday’s call “Their initial feedback has been just incredible.” The company has also seen 110,000 Silverado EVs reservations so far, Barra explained, “including reservations for more than 240 fleet operators, and the numbers keep growing every day.”
GM’s $35 billion EV and autonomy investment announced last June, is already beginning to pay dividends. “Battery cells will not be a constraint to our long term EV growth,” Barra noted. The company expects its first battery cell manufacturing plant in Lordstown Ohio by the middle of the year, with two more expected to commence operations by the end of next year and the location of a fourth site set to be announced later this spring. These will work in tandem with the automaker’s Michigan-based Factory ZERO and Orion EV assembly plants.
On the autonomy front, GM has nothing but good news as its Cruise self-driving taxi service officially began offering driverless rides to the public in San Francisco Tuesday.
“This major milestone brings Cruise even closer to offering its first paid rides and generating $50 billion in annual revenue by the end of the decade,” Barra noted. “It also means that the SoftBank Vision Fund will invest — as planned — an additional $1.35 billion in Cruise. This is another strong vote of confidence in the Cruise team, its technology and services.”
The company also reiterated three of its ambitious climate goals during Tuesday’s earnings call: going “carbon neutral in our global products and operations by 2040,” eliminating “tailpipe emissions for new light-duty vehicles and offer all-electric heavy-duty vehicles by 2035” in line with California’s upcoming emission vehicle sales ban, and sourcing 100 percent of its production power requirements “from renewable sources by 2035, and by 2025 in the US.”
While interest in GM’s line of electrifieds helped propel sales, the lack of available processors to put in them hurt the company’s overall numbers. GM delivered 441,000 vehicles to American consumers in Q4 2021, does from 447,000 in Q3 and 771,000 in Q4 of 2020. Still, that dip only translated into a minor drop in overall revenue of $3.2 billion from $3.4 billion the previous quarter.
Looking ahead, GM expects the first of its Cadillac Lyriq to begin in less than 60 days while the first batch of its Hummer EV Pickups are already en route to their buyers. The company expects production on the EV600 to begin later this year with an initial capacity of around 30,000 units annually.
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