General Motors CFO Paul Jacobson said on Tuesday at the company's investor day that he expects its adjusted earnings in 2025 to be "similar" to its performance this year.
General Motors' 2024 adjusted EBIT margin target is between 13% and 15%, or $9.50 to $10.50 per share, up from its earlier target of 12% to 14%, or $9 to $10 per share.
Meeting the 2024 target and achieving similar profits next year will be a significant achievement, as auto sales and consumer spending have been slowing, and many Wall Street analysts expect 2025 to be a more challenging year for automakers.
Jacobson declined to provide specific financial targets ahead of the company's formal 2025 financial guidance, which it will release early next year.
He said that the earnings from electric vehicles would add $2 billion to $4 billion, and the sales and profits from traditional gasoline-powered vehicles would also increase, which would help boost most automakers' earnings, as many expect most automakers' earnings to decline.
Jacobson said that under current assumptions, General Motors would launch eight vehicles in the market, with an EBIT margin that would be about 9 percentage points higher than the average of previous comparable vehicles.
"As the company continues to adopt more efficient ways to design, produce and sell our vehicles, we expect to see earnings growth in the coming years," Jacobson said.
He said that General Motors' capital spending in 2025 is also expected to be consistent with this year. The company's 2024 financial guidance includes expected capital spending of $10.5 billion to $11.5 billion.
The tailwind for electric vehicles is both the savings from the growth in sales and the reduction in costs such as raw materials and battery production.
General Motors said its variable profit margin for its electric vehicles fell more than 30 percentage points year-on-year as of the third quarter.
General Motors CEO Mary Barra said on Tuesday that the company plans to produce or wholesale about 200,000 electric vehicles in North America in 2024, up from its previous target of 200,000 to 250,000 electric vehicles, and the previous target of 300,000.
General Motors' earnings in 2025 are also expected to benefit from cost cuts in fixed costs. Fixed costs have reduced by $2 billion over the past two years, after deducting depreciation and amortization. In addition, General Motors' demand and incentive spending has also been relatively stable.
Other than the 2025 financial targets, the automaker provided little important updates at the investor day.