GM, Ford count on gas-powered trucks

DETROIT— U.S. automakers General Motors and Ford face a challenge in common when they report first-quarter results next week: Explaining to investors where profit growth will come from in the months ahead as EV growth slows.

The slowdown in global electric-vehicle demand, intensifying competition from Chinese automakers and high U.S. borrowing costs have forced the U.S. automakers to delay investments and ratchet down costs over the past 12 months. With China’s economy slowing and U.S. inflation running hot, a macroeconomic growth boost looks a long way off.

That has companies like GM and Ford focusing on sales of their core gasoline-powered vehicles, from which they derive most of their profit. GM and Ford are scheduled to report results on Tuesday and Wednesday, respectively.

GM CEO Mary Barra will get a lift from strong demand for the automaker’s highly profitable Chevrolet and GMC brand pickup trucks and SUVs. Barclays earlier this month boosted its target price for GM shares by 10 per cent to $55, citing robust sales for GM’s truck and SUV lineup.

GM Chief Financial Officer Paul Jacobson said the year was off to a good start and the company felt positive about where demand was trending, while Ford CFO John Lawler, in reaffirming the company’s full-year profit outlook, said vehicle prices were holding up better than expected.

Legacy U.S. automakers, which rely heavily on sales of large trucks and SUVs, have been bogged down by higher expenses related to electrifying their vehicle lineups and bumpy demand for batteryelectric vehicles.

Evercore ISI analyst Chris McNally said in a research note that the momentum has shifted for the previous winners like Tesla as growth in EV sales slows.