GM's Gas-Powered SUVs and Electric Cars: A Recipe for Fatter Profits

GM is cooking up a storm in the automotive world, and it's all about the perfect blend of gas-powered SUVs and electric cars. The company's strategy is paying off, with fatter profits on the horizon. Let's dive into the details and explore how GM is making this happen.



GM's gas-powered SUVs have been a significant driver of its profitability and market share. The company's diverse portfolio of SUVs, from the Chevrolet Trax to the Cadillac Escalade, caters to a wide range of customer preferences and needs. This diversification has allowed GM to maintain a strong position in the market, even as the demand for electric vehicles (EVs) continues to grow.

One of the key factors driving the growth of GM's gas-powered SUV sales is the strong customer demand for these vehicles. All four of GM's major brands – Chevrolet, GMC, Buick, and Cadillac – posted significant gains in their SUV sales. For instance, Chevrolet's SUV sales were up 17% in the fourth quarter of 2024, while Cadillac's sales surged 35% during the same period. This strong demand is a testament to the appeal of GM's SUV offerings and the company's ability to meet the needs of its customers.

Another factor contributing to the growth of GM's gas-powered SUV sales is the company's commitment to innovation and technology. GM continues to invest in and develop its SUV models, incorporating advanced features and technologies that appeal to customers. For example, the Cadillac Escalade IQ, an electric version of the iconic SUV, is set to be released with features like semi-autonomous Super Cruise, allowing hands-free driving on many roads. This commitment to innovation helps GM maintain its competitive edge in the market and continue to attract customers to its gas-powered SUV offerings.

However, GM is not resting on its laurels when it comes to electric vehicles. The company's EV portfolio, particularly the Chevy Equinox EV, is contributing to its profitability and market share in several ways. The Chevy Equinox EV, with a starting price around $30,000, is expected to launch in the second half of 2023. Its affordability makes it accessible to a broader range of customers, further boosting GM's EV market share and profitability.

GM's EV sales have been surging, with a 60% increase in the third quarter of 2024, reaching a total of 32,195 units sold. This growth has helped GM capture a 9.5% share of the U.S. EV market, positioning it second behind Tesla. The company's average transaction price in the fourth quarter of 2024 approached $53,000, significantly higher than the industry average. GM has also been reducing its incentive spending per vehicle, indicating that customers are willing to pay a premium for its EVs.



However, GM faces several challenges in scaling production to meet demand. The company acknowledges the hurdles it will face in scaling production, citing supply chain issues and raw material shortages. To overcome this, GM is building four battery cell plants in the U.S. with the help of LG Energy. The first one, in Ohio, is in its startup stages, another is expected in 2023, one in 2024, and the fourth has yet to be announced.

In conclusion, GM's strategy of offering both gas-powered SUVs and electric cars is paying off, with fatter profits on the horizon. The company's diverse portfolio of SUVs and commitment to innovation have driven the growth of its gas-powered SUV sales, while its EV portfolio, particularly the Chevy Equinox EV, is contributing to its profitability and market share. As GM continues to address the challenges of scaling production to meet demand, it is well-positioned to capitalize on the growing demand for electric vehicles and maintain its competitive edge in the market.