GM will realize its EV ambitions by 2024, says CEO Mary Barra

By | March 30, 2024


By Brian Sozzi, editor-in-chief of Yahoo Finance

Decades of climbing the ladder and challenging conventional thinking have brought Mary Barra to the present – ​​the year ambitious EV goals are being realized at legendary automaker General Motors (GM).

“I think this is a year of execution in 2024,” GM’s longtime chairman and CEO said on a new episode of Yahoo Finance’s Lead this way. “I think it’s an important year.”

It sure feels like a rainy day in late January just a few miles outside of Detroit.

Barra spent half the day with me touring a new manufacturing facility in Warren, Michigan, that handcrafts $300,000-plus Cadillac Celestiq EVs that can be customized down to the stitching on the seats. These are some of the most expensive cars GM has ever made, and they don’t even have a gas tank.

The controls are impressively detailed from start to finish, just like the futuristic version of GM’s famous luxury brand Cadillac.

As for the other part of the day, Barra took me for a ride in the new Corvette E-ray hybrid – the American icon’s first hybrid.

The supercar has an electric motor in combination with a rear-mounted V8, delivering more than 650 hp. A few years ago, Barra agreed to move the engine from front to rear in order to better compete in performance with brands such as Ferrari (RACE) and Lamborghini.

It was a classic piece from Barra’s leadership playbook: bold but respectful of GM’s history.

‘I can’t take all the credit [for the engine move]said Barra from behind the wheel of the E-ray, praising the experienced gearheads on the Corvette development team.

Mary Barra, chairman and CEO of General Motors, visits an EV manufacturing facility in Warren, Michigan, with Yahoo Finance Executive Editor Brian Sozzi. (Yahoo Finance)

Inside the leadership climb

Following in her father’s footsteps (he was a stamp maker at GM’s now-defunct Pontiac badge), Barra, 62, began her journey inspecting fenders at a Pontiac factory at age 18.

She graduated from General Motors Institute in 1985, where she received a Bachelor of Science degree in electrical engineering.

From then on, her career path was as winding as a country road – with assignments in communications, marketing and production.

It’s these connections to the company’s history and operations that have given Barra a lot of credibility among its supporters – something that was easy to see during our factory walk in Warren.

Auto industry experts say Barra’s intricate knowledge of GM’s operations has helped develop a balanced, gaffe-free leader who is widely respected.

“She has a leadership style that may be a little more stable and less prone to controversy than some others,” Sean Tucker, senior news editor at Cox Automotive, told Yahoo Finance.

All in all, Barra has leveraged her wealth of experience to navigate a host of tough situations since she was announced as CEO on December 10, 2013 – the first woman to hold the top spot at a Big Three automaker.

They ranged from apologizing to victims of a faulty ignition switch early in her term, to battling a prickly President Trump who tweeted about the company during COVID, to more recently dealing with UAW negotiations and an autonomous cruise vehicle that fatally struck a pedestrian injured.

Just as difficult: GM switching to electric vehicles against a backdrop of uncertainty about range, fierce competition and still relatively high prices for the technology. Between 2020 and 2025, GM plans to invest $35 billion in the development of electric and autonomous vehicles, surpassing spending on gasoline and diesel.

The company plans to introduce the Silverado EV, GMC Sierra EV, Equinox EV, Escalade IQ and Celestiq in 2024 alone, spearheading the EV revolution. They join an EV lineup currently led by the Lyriq and Hummer.

Read more: Are electric cars more expensive to insure?

Barra had aimed to be fully electric by 2035, but has since softened its stance amid industry-wide weakness in electric vehicle sales. The company will leverage the rising popularity of hybrids as a means to bridge the gap.

GM is still targeting total sales of $280 billion by 2030 – more than double its 2021 sales – partly due to expectations around electric vehicles.

“We still believe in an all-electric future,” Barra said.

Until recently, high belief and investment in electricity weighed on GM’s stock price.

“I believe Mary has done a commendable job in building the yellow brick road to growth, but the execution has been choppy. This has been like pushing a boulder up a hill, but we think the tide is starting to turn for GM,” says Wedbush analyst Dan. Ives told Yahoo Finance.

A drive-down appreciation street

Delve into GM’s valuation metrics on Yahoo Finance and you can see that investors want to see all of Barra’s initiatives pay off.

GM’s forward price-to-earnings ratio is just 4.3 times, a significant discount to the S&P 500 index’s 22 times. Tesla’s (TSLA) forward PE ratio is a whopping 63 times.

According to Yahoo Finance calculations, the stock is also trading at a 26% discount to book value.

To be fair, the stock has been rising lately due to several catalysts.

First, GM rolled out a $10 billion stock buyback plan and implemented a 33% dividend increase at the end of 2023. Barra told me at the time of the announcement that she wasn’t happy with the stock price, so she and the management team are taking action to convey their confidence to investors.

Then in February, GM said it expects “variable” EV profitability in the second half of 2024.

Fully recognized profits are expected in 2025.

“They will be successful in the electric car space, I am confident,” said Cox Automotive’s Tucker.

Whatever happens, one thing cannot be denied: Barra’s place in the history books of automotive leadership.

But ask Barra if she considers herself an iconic figure: “No, I feel very fortunate to lead this team.”

Brian Sozzi is editor-in-chief of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi and further LinkedIn. Tips about deals, mergers, activist situations or something else? Email brian.sozzi@yahoofinance.com.

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