General Motors (GM) expects its adjusted pre-tax profit in 2021 to reach about $14 billion, above the previous forecast, the automaker’s chief financial officer, Paul Jacobson, said during a presentation.
GM had forecast adjusted pre-tax earnings of $11.5 billion to $13.5 billion.
GM’s financial performance is benefiting from strong consumer demand, high new vehicle prices and more stability in semiconductor supplies, Jacobson said.
However, vehicle production and inventories will not return to normal until the end of 2022, warned Jacobson.
Tight inventories support higher prices. But GM and its rivals are also struggling with rising costs for the commodities used in their vehicles.
“We see inflation everywhere,” said Jacobson.
In an online conversation with an auto industry analyst at Credit Suisse, Jacobson said GM will be aggressive in investing in electric vehicles to try to catch up with electric vehicle market leader Tesla and compete with rivals such as Volkswagen and Ford.
Jacobson said he would rather have GM build a battery factory that sits idle for two or three years than run out of enough battery capacity.
“There’s money in the account and the checkbook is open,” Jacobson said.
This is in sharp contrast to the austerity GM imposed in early 2020, when the pandemic forced a near-total suspension of production.
Reference: CNN Brasil
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