Mary Barra, Chair and CEO of the General Motors Company (GM), speaks in the course of the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon | AFP | Getty Images
DETROIT – It has been a 12 months since General Motors announced plans to double its revenue by the top of this decade through profitable growth in all-electric vehicles and emerging latest businesses.
At the moment, the Detroit automaker detailed its long-term “roadmap” to achieving annual revenue of $280 billion and operating profit margins of 12% to 14% by 2030. But the corporate was light on near-term details and guidance, which Wall Street has grown increasingly cautious of during a period of rising rates of interest, surging inflation and recessionary fears.
GM will look to deal with such concerns during an investor event, which kicks off at 1 p.m. ET Thursday in Latest York. The event will give attention to GM’s plans through 2025, including “rapid scaling” of its latest EVs and supporting technologies, while leveraging its traditional gas- and diesel-powered “vehicles to keep up strong margins,” CEO Mary Barra told investors last month.
Analyst are expected to press executives on updates to its previously announced plans, short-term guidance and potential macro-offsets within the years ahead, especially in 2023.
“While we don’t expect formal 2023 guidance (other than perhaps high-level comments), we predict GM does have a possibility to focus on potential macro-offsets next 12 months,” Citi analyst Itay Michaeli wrote in an investor note last week.
They’ll even be closely monitoring how GM plans to spice up profits of EVs to wean the automaker off its reliance on large fossil-fuel powered pickup trucks and SUVs within the long-term, as the corporate has said it plans to exclusively offer EVs by 2035.
Barra, as first reported by Bloomberg News, is predicted to inform investors Thursday that the corporate expects its electric-vehicle program to be profitable in 2025.
Wells Fargo Colin M. Langan is “skeptical” that GM’s electric vehicles could be sustainably profitable by 2025, even with incentives within the Biden administration’s Inflation Reduction Act. He said pricing and raw material assumptions might be key.
“On the last Investor Day, GM promised ICE-like EV margins by 2030. Since then, battery raw material costs have dramatically spiked; subsequently, it will be surprising if GM can still see EV profitability by 2025,” Langan wrote Tuesday.
GM previously said it secured binding commitments for all of the battery raw material it must deliver its 2025 electric vehicle capability goal of 1 million vehicles. The corporate also has plans for capability of 1 million EVs in China by then as well.
Investors will even be on the lookout for any change regarding short-term financial guidance; goals for EV sales, including outselling Tesla in EVs by mid-decade; and updates on its growth businesses resembling OnStar, BrightDrop industrial EV vans and others.
Since GM’s investor day last 12 months on Oct. 5, shares of the corporate have fallen by roughly 31% to around $37.60 per share ahead of the Thursday event. The corporate’s market cap is roughly $55 billion
If GM can deliver, if not exceed, expectations of investors in the course of the event, analysts say it needs to be a positive catalyst for the stock despite broader economic concerns.
“If investors can walk away feeling higher about 2023 macro resilience (something GM has already established track record for in 2020-22) and with more granularity across several imminent growth levers, we predict the stock can work from here,” Michaeli said.
–CNBC’s Michael Bloom contributed to this report.