President Joe Biden delivers remarks on the Infrastructure Investment and Jobs Act at the General Motors Factory ZERO electric vehicle assembly plant, Wednesday, November 17, 2021, in Detroit. (Official White House Photo by Adam Schultz)
General Motors, which was the recipient of a government bailout operation only fourteen years ago, has told an investor conference in New York that it will rely on government subsidies for electric vehicles to make building them profitable by 2025. Government subsidies are, of course, money taken from taxpayers and given to corporations that are supposed to earn their own profits. Mike Colias reports for The Wall Street Journal:
General Motors Co. GM 2.94%increase; green up pointing triangle expects to be solidly profitable on electric vehicles sold in North America by 2025, due in large part to new federal subsidies offered as part of the recently passed U.S. climate legislation.
Company executives, speaking at an investor conference in New York on Thursday, said that the combination of government incentives for U.S. battery-making facilities and revisions made to the EV tax credit for buyers would help boost its margins in the coming years.
GM also expected to improve profitability on these models by bringing down battery costs and shaving roughly $2,000 per vehicle off the expense of selling cars through dealerships.
GM executives have sought to tamp down concerns among investors that the switch from gas-engine vehicles to battery-powered cars will pressure its bottom line. The electric vehicles that traditional car companies sell today are generally less profitable than internal-combustion models and in some cases lose money, because of the high cost of the battery.
GM said it expects operating-profit margins in North America—the region that generates the bulk of its profit today—would remain in the 8%-to-10% range over the next several years, even as it increases capital investment to pave the way for a broader lineup of EVs.
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