GM letter to shareholders for the second quarter of 2023

2023-07-25

News and events

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To Our Shareholders:

I am pleased to share with you that General Motors’ automotive operating results continue to demonstrate strong growth. We’re building momentum thanks to incredible customer response to our new trucks and SUVs, and strong execution of our business plan by the GM team, our dealers and our suppliers.

Together, we delivered $3.2 billion in EBIT-adjusted in the second quarter, which includes a $792 million impact from new agreements with LG Electronics and LG Energy Solution.

The charge reflects the conscious decision we made during the Chevrolet Bolt EV and Bolt EUV recall to serve our customers in ways that go beyond traditional remedies, and we are taking new steps that will reduce GM’s costs and improve our EV margins over time.  

The biggest driving force behind our financial results is customer demand for our vehicles, which have now led the U.S. industry in initial quality for two consecutive years. We have earned four consecutive quarters of higher retail market share in the U.S. versus a year ago with continued strong pricing and incentive discipline, we’re leading in both commercial and total fleet deliveries calendar year to date, and we’re growing profitably in international markets such as Brazil and Korea.

For example, half of customers in the U.S. for the new Chevrolet Trax and two-thirds in Korea are new to GM. In just four months, the Chevrolet Montana, our first compact pickup for the Brazil market, has earned one-third of its segment. We also continue to lead the full-size pickup market in the U.S., with the new Chevrolet Silverado HD and GMC Sierra HD adding to our momentum.

In the electric vehicle market, we met our target to produce 50,000 EVs in North America in the first half of the year. With both cell and vehicle production increasing, we continue to target production of roughly 100,000 EVs in the second half of this year and we’ll grow from there.

At the same time, we are focused on strong cost discipline and we’re taking steps to lower our capital spending.

The impact on our bottom line and our outlook is clear, so we are raising our full-year EBIT-adjusted guidance by $1 billion and our adjusted automotive free cash flow guidance by $1.5 billion. We now expect earnings per share to be between $7.15 - $8.15 per share.

We’re also spending less and lowering our capital spending guidance because we’re focusing on the most strategic internal combustion engine and EV programs, and our highest impact growth initiatives, including Cruise, BrightDrop and software-defined vehicles.

This is the second time we’ve raised guidance this year and it assumes that we successfully negotiate new labor agreements without a work stoppage.

I’d like to close this letter by addressing our labor negotiations with the UAW, which just kicked off, and with Unifor.

First and most importantly, I want to say how proud I am of our manufacturing team. Together, we’ve built a broad base for continued profitable growth.

We have a long history of negotiating fair contracts with both unions that reward our employees and support the long-term success of our business. Our goal this time will be no different.

That’s the best possible outcome for all our key stakeholders, including our team, plant communities, dealers, suppliers and investors.

Thank you for your continued confidence in GM.

mtb

Cautionary Note on Forward-Looking Statements: This press release and related comments by management may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact and represent our current judgment about possible future events. In making these statements, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where we are expressly required to do so by law.