General Motors is pumping an additional $6billion into a share buyback scheme, adding to the Detroit firm's bullish progress for 2024.
The news surfaced on Tuesday, following the automaker's announcement of a $10billion share repurchase authorisation last November. GM's shares witnessed a 1.4% increase to $48.21 on Tuesday amid while wider markets were mixed. The company's shares have risen by a third since the kick-off of 2024.
GM announced plans back in April to relocate its Detroit base to a sleek downtown office building next year, also hiking its dividend from 9 to 12 cents per share. Meanwhile, GM confirmed a further investment of $850million in its troubled Cruise autonomous vehicle unit, as the firm explores long-term funding options including partnerships and external financing.
This cash infusion aims to "help with operational cash needs" until a suitable capital strategy is found for Cruise. Troubles came to a head for Cruise in October, when one of its Chevrolet Bolt autonomous electric vehicles dragged a pedestrian roughly 20 feet at approximately 7 miles per hour on a San Francisco street after being hit by a man-driven car.
However, the California Public Utilities Commission, which granted Cruise a permit to operate a 24/7 fleet of autonomous taxis throughout San Francisco in August, accused Cruise of concealing details of the crash for over two weeks. This incident led to the suspension of Cruise's license to operate its driverless fleet in California by regulators and sparked a clear-out of its leadership.
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Speaking at Deutsche Bank's Global Automotive Conference on Tuesday, GM Chief Financial Officer Paul Jacobson revealed that the company has lowered its full-year electric vehicle production forecast to between 200,000 to 250,000. Previously, the company had predicted a range of 200,000 to 300,000.
Industry experts had anticipated EVs would makeup 10% of US vehicle sales this year, but it's now trending towards about 8%, according to Jacobson. This year has seen something of a revival for General Motors, whose shares plummeted to around $26 late last year. Excluding the pandemic-induced slump in spring 2020, GM shares hadn't dropped that low in a decade.
GM reported a first-quarter profit of $2.97 billion, a 25% increase from the same period a year earlier, driven by robust deliveries of pickup trucks and other high-profit vehicles. Although US vehicle sales dipped slightly earlier this year, the company has stressed its focus on profitability and expense management.
It comfortably exceeded Wall Street's sales and profit targets and raised its guidance for 2024. GM's comeback is notable as its US competitors appear to be stagnating, despite robust new car sales. Ford's shares have seen less than a 1% increase this year and the firm's net income for the first quarter dropped by 24% compared to last year.
Stellantis has reported a decrease in sales for the first quarter and its shares have dipped nearly 7% this year. Elon Musk's Tesla has experienced a significant drop in sales for the first quarter due to increased competition and a slowdown in electric vehicle sales. Sales decreased by 9% during this period, marking the first quarterly sales decline in almost four years.
This slump occurred despite the company introducing several substantial price reductions on some models. Tesla shares have shed nearly a third of their value this year.
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