GM raises 2022 profit guidance, now expects electric vehicle business to be profitable by 2025

General Motors shares were strong this afternoon as the company raised its full-year profit guidance and gave investors an update on the company’s electric vehicle transition at an investor day in New York City.

Chief Financial Officer Paul Jacobson said the company now expects full-year 2022 adjusted auto industry free cash flow of $10 billion to $11 billion, updating previous guidance of $7 billion to $9 billion. GM lowered the lower and upper bounds of its 2022 adjusted earnings before interest and taxes to $13.5 billion to $14.5 billion, from a previous guidance range of $13 billion to $15 billion.

NEW YORK, NY - NOVEMBER 17: General Motors Corporation banner is displayed at the New York Stock Exchange during morning trading on November 17, 2022 in New York City. Stocks were expected to fall as interest rates rose at the open as Fed officials signaled more rate hikes to continue slowing inflation.  (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NY – NOVEMBER 17: General Motors Corporation banner is displayed at the New York Stock Exchange during morning trading on November 17, 2022 in New York City. Stocks were expected to fall as interest rates rose at the open as Fed officials signaled more rate hikes to continue slowing inflation. (Photo by Michael M. Santiago/Getty Images)

Looking ahead from 2023 to 2025, GM now expects revenue to grow at a compound annual growth rate of 12% through 2025, with revenue exceeding $225 billion as EV sales and software revenue grow. The company expects electric vehicle revenues to exceed $50 billion in 2025.

As for its EV game plan, the automaker said its EV portfolio will be “solidly profitable in 2025” in North America as the company expands EV production capacity to more than 1 million vehicles per year. GM sees the electric vehicle business as profitable by 2025, years ahead of schedule, when GM originally projected that margins on EVs would match those of gasoline-powered vehicles by 2030.

The company cited the impact of the Lower Inflation Act and its incentives to produce electric vehicles and batteries in North America.

“It’s clear that these credits will help usher in a new era of technological innovation and job creation that will deliver on expectations,” GM Chief Executive Mary Barra said in a speech at GM’s Investor Day in New York. “It’s good for the American economy. It’s good for American families. It’s good for the environment and, frankly, GM is ready.”

The story is developing.

Pras Subramanian is a reporter for Yahoo Finance.you can follow him Twitter and many more instagram.

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