General Motors says electric vehicles will be profitable by 2025

Detroit-based automaker General Motors says it expects its portfolio of electric vehicles to turn a profit in North America by 2025 as it boosts battery and assembly plant capacity to build over 1 million EVs per year.

As reported by the Associated Press and other news outlets, GM CEO Mary Barra used the pledge to kick off the company’s investor day event on Nov. 17 in New York.

The profit figure includes vehicle sales revenue, benefits from emissions tax credits, and revenue from software and parts sales, Barra said.

Barra also said the company’s EV portfolio appeals to a broader range of customers than the competition, in a lineup that includes a small SUV for around $30,000, plus a luxury SUV, pickup trucks, and Hummer SUVs in the next two years.

Barra said that GM, which has a goal of selling only electric passenger vehicles by 2035, is sticking by a pledge she made to sell more EVs in the U.S. than market leader Tesla by the middle of the decade.

“Our commitment is to lead the industry,” GM’s chief financial officer Paul Jacobson told reporters ahead on the investor day event. “We believe that with the infrastructure that we put in place and the vehicles that you’ll see today, we’ll be able to get there.”

The 2025 profit prediction is on a pre-tax basis that includes the capital costs of building battery factories and converting internal combustion plants to electric vehicles.

Jacobson said it will take time for individual electric vehicles to get to “low- to mid-single digit” profit margins in 2025 as costs are spread over more vehicles. EV profit margins will go higher once clean energy tax credits from the federal Inflation Reduction Act are applied, Jacobson said.

GM customers, he said, should be able to get half the $7,500 federal EV tax credit next year, reaching the full credit by mid-decade. To get the credits, EVs and batteries must be built in North America, with battery minerals sourced on the continent.

GM said its Brightdrop commercial vehicle unit, which is making electric vans and carts, will contribute over $1 billion of revenue next year. For electric vehicles next year, GM will revive the Buick Electra name for a new SUV that will go on sale first in China, then in the U.S. Then comes the Cruise Origin, a multi-passenger vehicle built for the company’s ride-hailing service, and a Cadillac compact SUV.

Among the 2024 EVs is the GMC Sierra full-size pickup., a full-size Cadillac SUV, and full-size Buick and Chevrolet electric cars mainly for China.