General Motors has been making a major push in the EV Market. They had tremendous growth in 2024 but can they maintain it to become a real competitor / threat to Tesla. One of the key factors to look at is the profitability of GM’s EV division compared to Tesla? From a recent analysis, Tesla had a gross profit per vehicle sold of roughly $7,700 in 2023 while GM had a comparable profit of $4,300 for all of its vehicles. As to its EV, they have just cleared profitability on variable costs (not a pure profitability but just the margin cost to produce another EV).
It looks like GM has a long way to go to match Tesla financially or even the financial results of their internal combustion engine vehicles. But if they maintain their focus, they can make a profitable business of their EV initiative.
But for a long-term outlook can GM compete. It will come down to which EV’s consumers want to buy. Will they stay with Tesla current line up that includes the Model 3, Y, S and X as updated from time to time? Or will they migrate to the Chevy’s and Cadillacs that GM is starting to produce?
Time will tell of course. My take is that GM will slowly but surely take market share away from Tesla for a few reasons. First, Tesla’s vehicles are aging and people will want new and different models. Second, the politics of Elon Musk will negatively impact the desirability of purchasing a Tesla. A whole bunch of people who buy EV’s tend to be democrats and it is not a great sales strategy to piss them off.
I have a positive believe in the future of GM’s EV initiative.