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GM doubles share of U.S. EV sales to 12% in 2024

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GM credits broad EV lineup for sales surge

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EV sales still only about 6% of overall deliveries

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Trump's plan to kill EV subsidies would test GM's EV

momentum

By Kalea Hall

DETROIT, Feb 28 (Reuters) - General Motors ( GM ) has spent

billions over decades trying to blaze an electric trail,

releasing pioneering EVs and hybrids that ultimately failed to

achieve mass-market sales before being scrapped. This time might

be different.

Last year, the U.S. auto-sales leader boosted electric

vehicle sales and seized market share from the likes of Tesla

despite slowing demand as its customers increasingly chose EVs

over comparable GM gas-powered models.

The progress - driven by an expanding EV lineup that will

soon include a dozen models - signals that GM could for the

first time convince more mainstream buyers to go electric, four

industry analysts said.

GM's fourth-quarter share of U.S. EVs hit 12% - double a

year earlier and second only to Tesla at 44.4%,

according to auto services specialist Cox Automotive.

Sales of GM's Cadillac Lyriq EV tripled last year to 28,402,

outpacing each of its XT4, XT5 and XT6 gasoline SUVs. Sales of

its lower-priced Chevrolet Equinox and Blazer EVs accounted for

22% and 40% respectively of total fourth-quarter deliveries

under the same model name.

The growth underscores GM's stubborn commitment to EVs,

despite heavy losses and a trend among rivals including Ford

and Toyota ( TM ) to prioritize gas-electric hybrids.

Analysts credited GM's EV surge to its growing number of

competitive models - from entry-level to premium - giving its

customers more electric options than rivals. Tesla, for example,

has five models and only two volume sellers.

GM global markets chief Rory Harvey cited the same reason in

an interview with Reuters.

"We've got the broadest lineup out there, and we definitely

have momentum," he said. "And we all know that the automotive

industry is a momentum game."

ACID TEST

Aggressive pricing also played a role in the form of

low-payment leases that often made GM EVs cheaper than its

comparable fuel-powered vehicles, according to industry analysts

and two GM dealers.

Such cheap EV leases, common industry-wide, were made

possible largely by a $7,500 subsidy that U.S. President Donald

Trump is expected to end along with a host of other pro-EV

policies. GM would also be vulnerable to Trump's threatened 25%

tariffs on Canada and Mexico because it makes hundreds of

thousands of cars in Mexico - including the Blazer and Equinox

EVs.

Industry experts said political and EV market headwinds will

make 2025 an acid test for whether GM can sustain its momentum

and hit a tipping point in its long and expensive history of

electrification efforts. One pivotal moment will come later this

year as GM launches the next-generation Bolt, expected to be its

most affordable EV at about $30,000.

"This year is critical for them," said Paul Waatti, industry

analysis director at research firm AutoPacific.

GM has historically been first out the gate with innovative

electrified cars only to stumble in launches dating back to its

1997 EV1, a futuristic pill-shaped two-door. GM also introduced

the first mass-produced plug-in hybrid, the 2011 Volt, and

followed up with the all-electric 2017 Bolt, the only relatively

affordable EV at the time. All were discontinued without

achieving volume sales.

Despite its recent progress, GM still faces immense

challenges in delivering on CEO Mary Barra's past pledge of an

all-electric fleet by 2035. EVs only comprised about 6% of GM's

overall fourth-quarter sales, which continue to rely on large

trucks and SUVs that are among the hardest vehicles to

electrify, industry experts say.

PROGRESS TOWARD PROFIT

Instead of just one Volt or Bolt, GM now offers 10 models,

from the affordable Equinox crossover to six-figure SUVs.

Cadillac just launched its Optiq compact electric SUV, which

will be followed soon by a three-row Vistiq and lower-priced

electric pickups.

GM says it's also getting closer to making EV profits. CFO

Paul Jacobson has said GM plans to narrow EV losses by about $2

billion in 2025, without disclosing total annual losses. That

estimate, however, depends on continued EV sales growth, which

could prove hard if Trump guts EV purchase and lease subsidies.

Losing the $7,500 incentive could tank EV sales unless

automakers cut prices, said Ivan Drury, director of insights for

automotive research firm Edmunds.

"We know what happens if you don't provide it," he said of

EV subsidies and discounts. "You don't sell."

GM said it had not decided whether to lower prices if the

subsidies end and that it would wait to assess consumer and

competitor reactions. GM nonetheless takes a "very long-term

view" of its EV commitment, said spokesman Jim Cain.

A $7,500 EV lease incentive has been key to low-payment

deals to persuade skeptical EV shoppers. More than 70% of EVs

were leased last year at dealerships, including 55% of GM's

electric vehicles, Edmunds data shows.

"It's really the lease offer that makes the big difference,"

said Jeff Laethem, at Detroit's Ray Laethem Motor Village, which

includes a Buick and GMC store. For some premium models, it's a

$700 monthly payment for a $100,000 vehicle, he said.

EVS OVER HYBRIDS

GM continues to bet big on EVs at a time when rivals such as

Ford and Toyota ( TM ) have focused more on hybrids - a decision that

has paid off for them as consumers turn to hybrids in droves to

avoid the cost and charging hassles of EVs.

Toyota ( TM ) has long dominated the hybrid market and sells few

EVs, arguing that EV technology isn't yet advanced or affordable

enough for most customers. Hybrids represented more than 40% of

Toyota's ( TM ) 2.3 million U.S. deliveries last year. Ford's hybrid

sales jumped 40% to about 187,000, nearly double its EV sales of

some 98,000.

GM, by comparison, sold 114,432 EVs. The automaker plans to

offer plug-in hybrids for 2027 as a short-term strategy to meet

emissions regulations but has no plans to make traditional

hybrids, which cost less and don't need charging.

"Ultimately, we believe that EVs are going to be the way

forward," GM's Harvey said, "complemented with some hybrids."

At a New York industry conference in February, CEO Barra

called hybrids an interim solution, arguing that developing a

vehicle with two propulsion systems - gas and electric - is an

inefficient use of capital.

GM might be better off sticking to EVs in part because it

would now take substantial investment in hybrid powertrains to

steal sales from entrenched competitors, said David Whiston, an

automotive stock strategist at Morningstar Research.

"It would be hard for GM to compete head-on with Toyota ( TM ) in

hybrids," he said.

GM officials argue it's not missing out on sales in the

hybrid boom because it offers other fuel-saving technologies,

such as diesels and small, turbocharged gasoline engines.

THE TRUCK DILEMMA

The biggest obstacle to GM's all-electric ambitions,

however, might be its own lucrative business in full-sized

pickups and SUVs.

GM's ambitions for a rapid electric truck transition have so

far clashed with the challenges of making them affordable and

capable enough to sell in large volumes. In 2022, GM planned

annual capacity for 600,000 electric trucks at its Detroit

Factory Zero plant and another factory it planned to reopen in

nearby Orion Township. It has repeatedly delayed the Orion

reopening, now scheduled for mid-2026.

GM started delivering the Silverado EV RST First Edition,

priced at $94,500, in mid-2024. But it sold just 9,000 electric

Silverado and Sierra pickups last year out of about 900,000

total. Rivals' electric trucks introduced before last year -

Ford's F-150 Lightning and Tesla's Cybertruck - had about 33,000

and 39,000 sales in 2024, respectively, but the overall electric

truck segment remains tiny.

This year, GM hopes to boost sales with two new trim levels

starting at about $57,000 and $73,000.

One drag on EV pickup sales is the fact that carrying or

towing heavy payloads can dramatically reduce their driving

range, requiring constant recharging.

Seeking more range, automakers have added larger batteries,

but that makes EV trucks extremely expensive, said Sam

Abuelsamid, vice president of market research for Telemetry

Insights.

GM's highly profitable truck-and-SUV business has been

pivotal in helping GM finance money-losing forays into EVs and

autonomous vehicles. But it will struggle to squeeze the same

profits from electric trucks, Abuelsamid said.

"For the foreseeable future," he said, "they're probably not

going to be able to get the same margins - not unless we have

some major breakthrough on the battery front."