By David Shepardson
WASHINGTON (Reuters) - General Motors (NYSE:GM) said on Thursday it expects significant reductions in electric vehicle production costs in 2024 as it boosts output of higher-profit models.
GM Chief Financial Officer Paul Jacobson said at a Barclays event the automaker would see improvements next year in EV margins as it expects to hit mid single-digit earnings before interest and taxes margin targets by 2025.
"We don't want to be the next Tesla (NASDAQ:TSLA). We want to be the best GM that we can be," Jacobson said.
His comments came a day after GM took a series of steps to reassure investors, including announcing $10 billion in new share buybacks, a 33% dividend increase and "substantially lower" spending at its robotaxi unit Cruise.
GM, which has vowed to stop selling gas-powered vehicles by 2035, last month said it was abandoning a goal of building 400,000 EVs from 2022 through mid-2024.
Jacobson said Thursday GM would see a "meaningful" EV production hike next year. "We do still expect to have 1 million units of (EV) capacity by 2025," he said.
Jacobson said GM would reduce fixed costs in 2024 on EVs by about $20,000 per vehicle versus 2023.
GM's EV profit calculations include battery production tax credits as well as greenhouse gas reduction benefits.
GM also expects to make more higher-profit EVs in 2024, like the Hummer and the Blazer EVs, and "significantly fewer Bolts in 2024 as we shut that line down and then reintroduce the next-generation Bolt."
Nearly all the 56,000 U.S. EVs GM has sold this year are Chevrolet Bolts.
GM also expects a significant reduction in battery costs, including battery raw materials and moves to significantly decrease reliance on more expensive imported battery cells.
GM and joint venture partner LG Energy Solution are building three U.S. battery cell plants, including one opened in Ohio last year.
GM said in April it was building a new JV battery plant with Samsung (KS:005930) SDI. Jacobson said the Samsung JV "will bring even lower-cost batteries online in 2026 and beyond."