GM’s shareholder meeting sends mixed messages on EVs

While GM CEO Mary Barra emphasised the company’s dedication to EVs, its strategy for growth and profitability are uncertain, writes Will Girling

Much like fellow ‘Big Three’ US automaker Ford, General Motors has reckoned with significant losses from its electric vehicle (EV) activities to date. Although these have narrowed—from US$3.3bn in 2022 to US$2.5bn in 2023—Chief Executive Mary Barra emphasised during GM’s 2024 Annual Meeting of Shareholders (AMS) that growing EVs “profitably” would be one of the company’s ongoing commitments.

How GM proceeds with its EV business is clearly front and centre for shareholders themselves: four of the seven proposals announced during the 4 June event concerned EVs in some way. Three requested specific reports on aspects of the supply chain (child labour, deep-sea mined minerals, and sustainability risk), while one even called for EV-related targets to be eliminated from executive incentive compensation programmes.

All four were ultimately voted against, with the latter receiving only 1% shareholder support. EVs remain an important pillar of GM’s future strategy, but no longer to the exclusion of internal combustion engine (ICE) vehicles. Barra framed maintaining ICE, particularly the decision to scrap its elimination from the Cadillac brand by 2030, as staying “customer focused during the transition”. But do the company’s actions bear this out?

Elaine Borseth, President of the Electric Vehicle Association, criticised GM for stating that its continuation of ICE (both pure and hybrid) simply matches the ebb and flow of the US market. “GM might say the EV market is slowing, yet it also discontinued the Chevrolet Bolt, which was a large portion of its EV sales,” she told Automotive World. Indeed, the affordable (US$26,500) Bolt sold well but didn’t fit into a strategy geared more towards premium models. The nameplate’s return has been hinted as 2025, although details remain vague.

GM is talking the talk, but it isn’t walking the walk

The new Chevy Equinox, for which Barra expressed her pride several times during the AMS, starts at US$34,995, making it still a relatively cheap EV. Since the early adopter market is no longer able to sustain rapid EV market growth, mass market models offer a chance to recapture momentum. Yet affordability is not everything—the Tesla Model Y sold 1.15 million units globally in 2023 despite a starting price of US$44,630. The real question will be whether GM and other legacy US manufacturers can combine low price points with desirability as astutely as their Chinese competitors.

Regardless of GM’s confidence in the integrity of its supply chain, Borseth believes it will be “left in the dust” by China if it continues to “drag its feet” on developing innovative new EV offerings. President Biden’s 100% import tariff on Chinese EVs might buy the US’ domestic industry time, yet some economists’ analysis of the potential repercussions on inflation mean this could be just a short-term fix. Instead of focusing on today, GM needs to consider tomorrow more seriously.

“GM is talking the talk, but it isn’t walking the walk. It seems like the company just wants to continue doing what it’s always done instead of change business model,” said Borseth. That hesitation may partially come down to many EV divisions’ admittedly costly implications for the bottom line. However, Borseth previously called out Ford’s short-term profitability expectations with a reminder that even Toyota’s enduringly successful Prius took years to get into the black.

The GM Board of Directors’ recommendation to vote against the shareholder proposal for eliminating compensation programmes tied to EV targets indicates sincerity about growing its electric business. Barra stated that “2024 will be a record year for EV sales” and cited research that the segment might claim 10% (1.6 million units) of the US market. However, she told NBC immediately after the AMS that her company’s transition from ICE will play out “over decades”. This backtracks on the automaker’s previously established 2035 deadline for an all-electric lineup, and Barra’s repeated emphasis on pursuing EVs “profitably” creates uncertainty about GM’s plans for pacing. If Chinese OEMs continue on their present trajectory, shareholders may soon demand that certainty.

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