G.M. Profits Hurt by Electric Car Business and Strike
G.M. Profits Hurt by Electric Car Business and Strike

General Motors said on Tuesday that its profit in the final three months of 2023 was depressed by the cost of a 40-day strike at some of its U.S. plants and an accounting charge related to electric vehicles.

The automaker, which has been banking on a rapid rise in sales of battery-powered models, earned $2.1 billion in the fourth quarter, it said, up from $2.0 billion a year earlier. G.M.’s revenue jumped about 10 percent, to $171.8 billion.

“The pace of E.V. growth has slowed, which has created some uncertainty,” the company’s chief financial officer, Paul Jacobson, said in a conference call.

The strike, by the United Automobile Workers union, cost the company $1.1 billion. G.M. also spent $800 million on a settlement with LG Energy Solution, a battery supplier, that was related to a mass recall of the electric Chevrolet Bolt.

And the company took a charge of $1.7 billion primarily to account for battery cells that were produced at such a high cost that they led G.M. to lose money on electric vehicles that were equipped with them. Mr. Jacobson said the cost of cells was declining, and G.M.’s electric cars and trucks would become profitable in the second half of this year.

Several carmakers, including Tesla and Ford Motor, have reduced prices in response to weaker-than-expected demand for battery-powered cars. G.M. has also struggled to produce such vehicles in large numbers because of manufacturing problems with a new battery technology the company calls Ultium.

For the full year, G.M. said, it made $10.1 billion, a nearly 2 percent increase from 2022. Based on the company’s 2023 earnings, about 45,000 of its U.A.W. workers will receive profit-sharing bonuses of up to $12,250, the company said.

The automaker said it expected 2024 profit of $9.8 billion to $11.2 billion. That range suggests G.M. could enjoy a big jump in profits or suffer a small decline, highlighting the growing uncertainty about demand for cars and the overall health of the auto industry. The company expects to spend about $1 billion less than last year on its Cruise autonomous driving division, which has suspended the testing and commercial service of its fleet nationwide in response to growing safety concerns.

G.M. has also pared its electric vehicle ambitions. At one time, G.M. expected to produce 400,000 electric vehicles by the middle of 2024, but consumers have not flocked to battery-powered cars as fast as auto executives expected.

The company dropped that production target last year and has delayed the introduction of some new electric models it has been developing. Last month, it told dealers to stop selling the electric version of the Chevy Blazer until G.M. engineers could fix a software issue that could cause certain features of the sport utility vehicle to stop working.

In the fourth quarter, G.M. sold more than 19,000 electric vehicles, but most were Bolts, which are no longer being produced and used an older battery technology. Only about a third of the electric vehicles that were sold used the newer Ultium battery packs produced at a factory in Ohio that G.M. owns in a joint venture with LG.

Mr. Jacobson said that G.M. had “a lot of demand” for its electric vehicles, but that it was being cautious about building more vehicles than customers were ready to buy. “We feel good about where we are,” he said.

G.M.’s chief executive, Mary T. Barra, said the company expected to produce 200,000 to 300,000 electric vehicles with Ultium batteries in North America this year. It sold nearly 76,000 battery-powered cars and trucks in the United States in 2023.

Ms. Bara also said the automaker planned to sell plug-in hybrid vehicles in the next few years, something its dealers have been calling for amid sluggish sales of fully electric vehicles.

A plug-in hybrid pairs a gasoline engine with an electric motor and a battery that can be charged with a plug. Such vehicles can travel a short distance on just battery power. G.M. stopped making the Chevrolet Volt plug-in hybrid, which could travel up to 53 miles just on electricity, in 2019.

“Deploying plug-in technology in strategic segments will deliver some of the environmental benefits of E.V.s as the nation continues to build its charging infrastructure,” Ms. Barra said.

G.M. has set a goal of ending its production of internal combustion vehicles by 2035 as part of an effort to cut tailpipe emissions and combat climate change.