GM Reports Strong Q2, Plans to Bring Back Chevy Bolt – The Detroit Bureau

General Motors offered investors good news and an unexpected surprise with the company’s Q2 earnings results. The second quarter was profitable and the Chevrolet Bolt is coming back.

The profits were not a surprise, the return of the most affordable EV in the U.S. right now, was. CEO Mary Barra made the stunning announcement during the company’s earnings call following the release of its second quarter earnings results. 

The Bolt’s return comes just a few months after it was announced in April the company planned to discontinue it. The Orion, Michigan plant where it was produced is slated to begin producing the batter-electric versions of the Chevrolet Silverado and GMC Sierra full-size pickups.

However, the Bolt was the least expensive new electric vehicle in the U.S. when factoring in tax breaks from the U.S. government and GM’s move to slash its price by more than $6,000 for the 2023 model year.

“Our customers love today’s Bolt,” Barra said on the call. “It has been delivering record sales and some of the highest customer satisfaction and loyalty scores in the industry. It’s also an important source of conquest sales for the company and for Chevrolet.”

The Bolt is getting a few tweaks, including using GM’s new Ultium batteries, which should help with one of the current model’s glaring weaknesses: an inability to use fast chargers. While Barra said the new model would be developed on an “accelerated timeline” no further details were offered, including where it may be produced. The massive Orion plant, which was built in the 1980s, was designed to produce as many as five different vehicles at one time. 

GM’s rolling out two new “low cost” EVs in the second half of this year: the Blazer EV and Equinox EV, the latter coming in with a starting price at about $30,000. The average price of a new EV exceeds $55,000.

“This is a very capital-efficient, quick way to build on the strong consumer response we have to the Bolt and get an affordable vehicle out into the marketplace,” Barra said. “Frankly, I’m super excited about it.”

Good results

The news about the Bolt’s revival wasn’t the only reason Barra was excited. The company’s second quarter was a strong, and expectations are high enough the company revised its earnings guidance upward — for the second time this year.

The company exceeded all of its year-ago results, including a 25.1% increase in revenue to $44.7 billion from $35.8 billion. The company’s net income for the period was $2.6 billion compared to $1.7 billion in Q2 2022 — a jump of 51.7%. The net margin was 5.7%.

GM’s EBIT-adjusted income was $3.2 billion, which is a 38% increase over last year’s $2.3 billion, and an adjust margin of 7.2%.

“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,” Barra wrote in a letter to shareholders.

“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.”

Strong sales, including an expectation to meet its targeted EV sales of 100,000 units for the year, combined with a focus on cost discipline, encouraged the company to update its full-year guidance. Barra said the company raised its full-year EBIT-adjusted guidance by $1 billion and its 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.

Spending focus and labor talks

Barra also noted the company would narrow its spending focus on “the most strategic internal combustion engine and EV programs, and our highest impact growth initiatives, including Cruise, BrightDrop and software-defined vehicles.”

The company’s invest billions into its Cruise autonomous vehicle subsidiary, just recently getting approval in California to implement those vehicles as robotaxis in San Francisco with other cities expected to follow in short order. 

Additionally, Barra mentioned late last year, the company believed owners would spend $135 a month on software-based subscription services. While some scoffed, GM’s believes in the strategy enough that it announced it would no longer offer Apple CarPlay and Android Auto standard in its new vehicles beginning next year.

Finally, Barra struck a conciliatory tone regarding the UAW — much different than UAW President Shawn Fain. 

“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,” Barra wrote in the letter.

“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.”

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• Source: https://www.thedetroitbureau.com/2023/07/gm-reports-strong-q2-plans-to-bring-back-chevy-bolt/