General Motors says it expects its portfolio of electric vehicles to turn a profit in North America by 2025 as it boosts battery and assembly plant capacity to build over 1 million EVs per year.
CEO Mary Barra used the pledge to kick off the company’s investor day event Thursday in New York.
The profit figure includes vehicle sales revenue, benefits from emissions tax credits, and revenue from software and parts sales, she said.
Barra said the company’s EV portfolio appeals to a broader range of customers than the competition, in a lineup that includes a small SUV for around $30,000, plus a luxury SUV, pickup trucks, and Hummer SUVs in the next two years.
The Detroit automaker has a goal of selling only electric passenger vehicles by 2035.
GM is sticking by a pledge made by Barra to sell more EVs in the US than market leader Tesla by the middle of the decade.
“Our commitment is to lead the industry,” Chief Financial Officer Paul Jacobson told reporters ahead on the investor day event. “We believe that with the infrastructure that we put in place and the vehicles that you’ll see today, we’ll be able to get there.”
The 2025 profit prediction is on a pretax basis that includes the capital costs of building battery factories and converting internal combustion plants to electric vehicles.
Jacobson said it will take time for individual electric vehicles to get to “low- to mid-single digit” profit margins in 2025 as costs are spread over more vehicles. EV profit margins will go higher once clean energy tax credits from the federal Inflation Reduction Act are applied, Jacobson said.
GM customers, he said, should be able to get half the $7,500 federal EV tax credit next year, reaching the full credit by mid-decade. To get the credits, EVs and batteries must be built in North America, with battery minerals sourced on the continent.
Despite economic volatility and the possibility of a downturn, GM appeared more confident in this year’s financial results, saying Thursday it expects full-year pretax income to be $13.5 billion to $14.5 billion. That’s within the previous guidance range of $13 billion to $15 billion.
GM also said its Brightdrop commercial vehicle unit, which is making electric vans and carts, will contribute over $1 billion of revenue next year.
Shares of GM rose slightly Thursday as the broader markets declined.
The company says its modular Ultium EV architecture is flexible enough to allow multiple battery chemistries and cell sizes, and it can handle multiple vehicles. That’s one reason the company says the next two years put it on a path to double revenue by 2030.
Doug Parks, product development chief, said EVs are much simpler to build than internal combustion vehicles. For example, the Chevrolet Silverado EV has 45 percent fewer parts than its combustion equivalent, he said.
As for the new vehicles, GM will roll out an all-electric version of the Chevrolet Corvette next year, President Mark Reuss said.
“This will again set the standard of the world for performance,” he said.
Reuss gave glimpses of other new or revamped GM vehicles that are coming in the next two years. New internal combustion vehicles will be based on the existing underpinnings, saving costs, yet allowing the company to do significant upgrades, he said.
Among the revamped or new entries next year are the Chevrolet Traverse three-row SUV, as well as a new Buick SUV, and a revamped Chevrolet Trax small SUV starting around $19,000.
In 2024, GM will redo the three-row GMC Acadia SUV, making it more truck-like, Reuss said. Then it will revamp the internal combustion version of the Chevy Equinox small SUV in the biggest market segment in the world.
For electric vehicles next year, GM will revive the Buick Electra name for a new SUV that will go on sale first in China, then in the US Then comes the Cruise Origin, a multi-passenger vehicle built for the company’s ride-hailing service, and a Cadillac compact SUV.
Among the 2024 EVs is the GMC Sierra full-size pickup., a full-size Cadillac SUV, and full-size Buick and Chevrolet electric cars mainly for China.
Reuss also said GM is revamping the way customers buy electric vehicles, giving them the option of fully purchasing online or at the dealership and saving the company $2,000 per vehicle.
Rather than dealers holding huge inventories, they would keep fewer vehicles on lots. When a customer orders an EV, it would come from three US distribution centers, two in California and one in George. They would stock vehicles with popular equipment combinations and allow deliveries in as little as four days, Reuss said.
The system would automate a lot of financing and insurance costs. The $2,000 savings would go to GM.
Reuss also took a shot at US electric vehicle sales leader Tesla, telling analysts that more than 11,000 Tesla owners had vehicles serviced at a GM dealership. He said the dealer network is a big competitive advantage.
GM CEO Barra says electric vehicles to be profitable by 2025
https://arab.news/4zsnt
GM CEO Barra says electric vehicles to be profitable by 2025
- GM is sticking by a pledge made by Barra to sell more EVs in the US than market leader Tesla by the middle of the decade
Oil Updates — prices dip as demand optimism fades
BEIJING/SINGAPORE: Oil prices eased on Tuesday, extending losses into a second consecutive session after last week’s rally, although concerns about tighter Russian and Iranian supply amid widening Western sanctions checked losses, according to Reuters.
Brent futures edged down 8 cents, or 0.1 percent, to $76.22 a barrel by 07:52 a.m. Saudi time, while US West Texas Intermediate crude fell 15 cents, or 0.19 percent, to $73.42.
Both benchmarks slid on Monday, after rising for five days in a row last week to settle at their highest levels since October on Friday amid expectations of more fiscal stimulus to revitalize China’s faltering economy.
“This week’s weakness is likely due to a technical correction, as traders react to softer economic data globally that undermines the optimism seen earlier,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, referring to bearish economic news from the US and Germany.
Also dragging on oil prices is the rising supply from non-OPEC countries that, coupled with weak demand from China, is expected to keep the oil market well supplied this year.
Market participants are waiting for more data this week, such as the US December nonfarm payrolls report on Friday, for clues on US interest rate policy and oil demand outlook.
“The move higher in crude oil prices appears to be running out of momentum,” ING analysts wrote in a note.
“While there has been some tightening in the physical market, fundamentals through 2025 are still set to be comfortable, which should cap the upside.”
Worries over tightening Russian and Iranian supply amid sanctions, however, kept a floor under oil prices.
The uncertainty has translated into better demand for Middle Eastern oil, reflected in a hike in Saudi Arabia’s February oil prices to Asia, the first such increase in three months.
Money managers raised their net long US crude futures and options positions in the week to Dec. 31, the US Commodity Futures Trading Commission said on Monday.
Saudi Arabia issues $12bn three-part bond: NDMC
CAIRO: Saudi Arabia issued a $12 billion three-tranche bond, selling $5 billion, $3 billion and $4 billion in tenors of three, six and 10 years respectively, the National Debt Management Center said on Tuesday.
The total order book reached around $37 billion, equalling an over-subscription of three times the issuance, NDMC said in a statement.
The transaction is part of NDMC’s strategy to diversify the investor base and meet the Kingdom’s financing needs, it added.
Lucid beats estimates for EV deliveries as price cuts, cheaper financing spur demand
- Company handed over 3,099 vehicles in the fourth quarter ended Dec. 31
- For 2024, production rose 7% to 9,029 vehicles, topping Lucid’s target of 9,000 vehicles
LONDON: Lucid Group beat expectations for quarterly deliveries on Monday, as the Saudi Arabia-backed maker of luxury electric vehicles lowered prices and offered cheaper financing to drive demand, sending its shares up more than 6 percent.
The company handed over 3,099 vehicles in the fourth quarter ended Dec. 31, compared with estimates of 2,637, according to six analysts polled by Visible Alpha. That represented growth of 11 percent over the third quarter and 78 percent higher than the fourth quarter a year earlier.
Production rose about 42 percent to 3,386 vehicles in the reported quarter from a year earlier, surpassing estimates of 2,904 units.
For 2024, production rose 7 percent to 9,029 vehicles, topping the company’s target of 9,000 vehicles. Annual deliveries grew 71 percent to 10,241 vehicles.
Lucid, backed by Saudi Arabia’s sovereign wealth fund, started taking orders for its Gravity SUV in November, in a bid to enter the lucrative SUV sector and take some market share from Rivian and Tesla.
Rivian on Friday topped analysts’ estimates for quarterly deliveries and said its production was no longer constrained by a component shortage. But Tesla reported its first fall in yearly deliveries, in part due to the company’s aging lineup.
Demand for EVs, already squeezed by competition from hybrid vehicles, could face another challenge as President-elect Donald Trump is expected to reverse many of the Biden administration’s EV-friendly policies and incentives.
The company also raised $1.75 billion in October through a stock sale that CEO Peter Rawlinson believes will provide Lucid with a “cash runway well into 2026.”
Lucid, whose stock was down about 28 percent in 2024, is scheduled to report its fourth-quarter results on Feb. 25.
Saudi Arabia’s PIF completes $7bn inaugural murabaha credit facility
- Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions
- Facility builds on PIF’s recent success with sukuk issuances over the past two years
RIYADH: The Saudi Public Investment Fund has closed its first Murabaha credit facility, securing $7 billion in funding. This is a key step in the fund's plan to raise capital over the next several years.
The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release.
A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws.
“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al-Saif, PIF’s head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division.
The facility builds on PIF’s recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management.
Rated Aa3 by Moody’s and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse.
The fund’s capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments.
PIF’s strategy focuses on financing initiatives that contribute to economic growth in Saudi Arabia and internationally.
The $7 billion murabaha credit facility is expected to bolster PIF’s liquidity, supporting its investments both locally and globally.
By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances.
This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation.
Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion).
The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom’s general budgetary requirements.
Aligned with Saudi Arabia’s medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms.
It also adheres to robust risk management frameworks and the Kingdom’s approved annual borrowing plan.
PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom’s Vision 2030 economic diversification plan.
In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021.
In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling.
These efforts are part of PIF’s strategy to leverage a variety of funding sources to support its expansive investment activities.
Closing Bell: Saudi main market gains to close at 12,105 points
- MSCI Tadawul Index increased by 1.07 points, or 0.07%, to close at 1,510.91
- Parallel market Nomu lost 190.29 points, or 0.61%, to close at 30,864.09
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 34.87 points, or 0.29 percent, to close at 12,104.69.
The total trading turnover of the benchmark index was SR6.43 billion ($1.71 billion), as 137 of the listed stocks advanced, while 94 retreated.
The MSCI Tadawul Index also increased by 1.07 points, or 0.07 percent, to close at 1,510.91.
The Kingdom’s parallel market Nomu dropped, losing 190.29 points, or 0.61 percent, to close at 30,864.09. This comes as 36 of the listed stocks advanced, while 43 retreated.
Al Majed Oud Co. was the best-performing stock of the day, with its share price surging by 5.62 percent to SR158.
Other top performers included SAL Saudi Logistics Services Co., which saw its share price rise by 5.42 percent to SR276, and Riyadh Cables Group Co., which saw a 5.17 percent increase to SR158.80.
Al Mawarid Manpower Co. and Astra Industrial Group also saw a positive change, with their share prices surging by 5.17 percent and 5.05 percent to SR114 and SR195.40, respectively.
United International Holding Co. saw the steepest decline of the day, with its share price easing 2.45 percent to close at SR183.40.
Zamil Industrial Investment Co. and Nayifat Finance Co. both recorded falls, with their shares slipping 2.43 percent and 2.43 percent to SR36.15 and SR14.44, respectively.
National Co. for Learning and Education and Saudi Electricity Co. also faced losses in today’s session, with their share prices dipping 2.27 percent and 2.25 percent to SR197.80 and SR16.54, respectively.
On the announcement front, the Saudi Exchange announced the listing and trading of shares for Almoosa Health Co. on the main market starting Jan. 7.
During the first three days of trading, daily price fluctuation limits will be set at plus or minus 30 percent, while static price fluctuation limits will also apply.
From the fourth trading day onward, the daily fluctuation limits will revert to plus or minus 10 percent, and the static limits will no longer be enforced.
In a separate development, Almujtama Alraida Medical Co. announced the signing of a credit facility agreement with Alinma Bank worth SR45 million.
Alinma Bank saw a 0.17 percent decrease in its share price on Monday to settle at SR29.90.
The financing package includes an SR35 million revolving facility aimed at purchasing goods and an SR10 million revolving facility for capital expenditures.
The credit facilities have a duration of three years and are secured by a promissory note. The objective of the financing is to support working capital requirements and fund capital expenditures, the company stated.
Meanwhile, Mufeed Co. revealed the awarding of an SR41.5 million project focused on the development of concept, content, and execution of events aimed at reviving the Kingdom’s cultural and historical heritage.
The contract, which is set to be signed on Jan. 20, will involve a legal entity as the counterparty.
The project entails organizing unique activities designed to showcase and enhance the Kingdom’s rich historical and cultural narratives.
Mufeed Co. saw a 2.93 percent increase in its share price by the close of Monday’s trading session to reach SR73.80.
