GM profits hurt by unsold electric vehicles and strike

General Motors said Tuesday that its profits in the final three months of 2023 were hit by losses from unsold electric vehicles and the costs of a 40-day strike at some of its U.S. factories.

The automaker, which was banking on a rapid increase in sales of battery-powered models, earned $2.1 billion in the fourth quarter, up from $2.0 billion a year earlier. GM's revenue rose about 10 percent to $171.8 billion.

“The pace of EV growth has slowed, which has created some uncertainty,” the company's chief financial officer, Paul Jacobson, said on a conference call.

GM took a $1.6 billion charge related to unsold electric vehicles. The strike by the United Automobile Workers union cost the company $1.1 billion, and GM spent $800 million on a settlement with LG Energy Solution, a battery supplier, related to a massive recall of the electric Chevrolet Bolt.

Several automakers, including Tesla and Ford Motor, have cut prices in response to weaker-than-expected demand for battery-powered cars. GM has also struggled to produce such vehicles in large numbers due to production issues with a new battery technology the company calls Ultium.

For the full year, GM said it earned $10.1 billion, up nearly 9 percent from 2022.

The automaker said it expects profits of $9.8 billion to $11.2 billion for 2024. This range suggests that GM could see a big jump in profits or a small decline, highlighting the growing uncertainty about car demand and the overall health of the auto industry. The company expects to spend about $1 billion less than last year on its Cruise division, which has suspended testing and commercial service of its fleet nationwide in response to growing safety concerns.

GM has also lowered its electric vehicle ambitions. GM once expected to produce 400,000 electric vehicles by mid-2024, but consumers have not switched to battery-powered cars as quickly as drivers expected.

The company dropped that production target last year and has postponed the introduction of some new electric models it is developing. Last month, it told dealers to stop selling the electric version of the Chevy Blazer until GM engineers could fix a software problem that caused some of the SUV's features to stop working.

In the fourth quarter, GM sold more than 19,000 electric vehicles, but most were Bolts, which are no longer produced and used older battery technology. Only about a third of electric vehicles sold used the newer battery packs produced at an Ohio plant that GM owns in a joint venture with LG.

Mr. Jacobson said GM had “a lot of demand” for its electric vehicles, but it was cautious about building more vehicles than customers were willing to buy. “We feel good about where we are now,” he said.