As EV growth slows, GM and Ford rely on gas-powered trucks

When they release their first-quarter results the next week, American manufacturers General Motors, opens new tab, and Ford, opens new tab, will be up against the same obstacle: elucidating to investors the source of future profit growth as EV growth slows.

The last year has seen a downturn in the market for electric vehicles worldwide, increased competition from Chinese manufacturers, and high borrowing prices in the United States, which have caused American automakers to postpone investments and reduce expenses. A boost to macroeconomic growth appears distant given the weakening of China’s economy and the high level of inflation in the United States.

History U.S. manufacturers have been hindered by increased costs associated with electrifying their vehicle lines and erratic demand for battery-electric cars. These automakers mostly rely on sales of heavy trucks and SUVs.

Strong demand for the automaker’s very profitable pickup trucks and SUVs under the Chevrolet and GMC brands will help GM CEO Mary Barra. Barclays increased its target price for GM shares by 10% to $55 earlier this month, citing strong sales of the company’s truck and SUV lines.

While Ford Chief Financial Officer John Lawler reiterated the company’s forecast for full-year profit, GM Chief Financial Officer Paul Jacobson stated that the year was off to a strong start and that the business felt optimistic about the direction that demand was moving.

The carmaker declared earlier this month that it will halt two significant initiatives for electric vehicles. At an investor presentation, CFO Lawler stated that EV investments won’t proceed until they can «stand on their own» and turn a profit.