General Motors Reports Jump in Profits on Strong Sales

A pair of unsold 2022 Bolt electric vehicles sit outside a Chevrolet dealership in Englewood, Colo., on Sept. 12, 2021. (David Zalubowski/AP Photo)

General Motors has registered a strong third-quarter 2022 performance, hitting record revenue and double-digit growth in earnings before interest and taxes-adjusted margins.

Net income for the quarter ended September 2022 was $3.3 billion, up by $885 million from $2.42 billion in September 2021, financial data from the company show. Revenues were at $41.89 billion, up by more than $15 billion from $26.78 billion a year back. EBIT-adjusted margins jumped from $2.82 billion to $4.29 billion, an increase of more than 52 percent.

According to company guidance, full-year net income is expected to be between $9.6 and $11.2 billion, while the EBIT-adjusted margin is projected to be between $13 billion and $15 billion.

In a letter to shareholders, CEO Mary Barra claimed that despite a “challenging environment,” demand for GM products continues to be strong. The company affirms its full-year guidance and is “actively managing” the headwinds it is facing, she said.

“We also earned more than 8 percent of the U.S. electric vehicle market in the third quarter thanks to record sales of the Chevrolet Bolt EV and Bolt EUV. Our dealers and customers have embraced the Bolt because of its range, technology, and value, helping it outsell Ford’s Mach-E by more than two to one in September,” the letter stated.

GM’s production in North America rose to 651,000 in the third quarter, which is a 73 percent increase from a year ago, according to research firm Wards Intelligence.

In the wake of the COVID-19 pandemic, GM registered two years of strong profit growth as the company prioritized the output of its two profitable EVs, SUVs and large pickup trucks.

However, GM shares have fallen by more than 36 percent this year, as of Oct. 25, as investors are concerned about consumer demand potentially falling, supply-chain issues continuing, and commodity costs rising.

Electric Vehicle Market

During a conference call, Barra revealed that the company has scaled down its EV sales targets. “Due to a slightly slower launch of cell and pack production than we expected, our plan is now to produce 400,000 EVs in North America over the course of 2022, 2023, and the first half of 2024,” she said.

Previously, the company expected to sell 400,000 EVs from early 2022 through the end of 2023. The new decision thus extends the sales period by roughly six months. The battery-cell plant in Ohio took longer to hire and train workers as well as establish operations, resulting in revised targets.

However, Barra confirmed that the company’s longer-term target of selling one million EVs by 2025 in North America remains in effect.

Like many other automakers, GM is also racing to boost its EV sales. However, the firm remains far behind market leader Tesla, which has a market valuation more than 10 times that of General Motors.

In addition to the battery plant in Ohio, GM plans on building a second plant in the United States in 2023 and a third one in 2024. A fourth plant has also been planned.