GM, Ford may see profit hit amid cooling EV demand, US dealer software
Payne Capital Management President Ryan Payne breaks down the latest data on the auto industry during an appearance on ‘Mornings with Maria.’
General Motors and Ford may post lower profit when they report quarterly results this week, as the industry’s high-stakes bet on EVs fails to pay off, while a cyberattack on a crucial computer network used by dealerships disrupted sales.
GM is expected to report a 7.7% drop in second-quarter net income, while Ford is expected to post a 10% drop in profit, according to data from LSEG. GM is scheduled to report its results on Tuesday and Ford the following day.
The cyberattack-induced outage at CDK forced the retail technology provider to shut down a key software system used at more than 15,000 U.S. car dealerships in June, a major sales month in the industry.
Dealers are estimated to collectively lose about $1 billion because of the outage, according to consultancy firm Anderson Economic Group.
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GM is expected to post a 7.7% quarterly drop in net income amid cooling EV demand and the CDK cyberattack. (Photo by Paul Hennessy/SOPA Images/LightRocket via Getty Images / Getty Images)
A slowdown in growth of EV sales is also making it harder for automakers such as GM and Ford to boost volumes to levels where they can drive down costs and hit profitability sooner.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 14.12 | +0.14 | +1.00% |
| GM | GENERAL MOTORS CO. | 49.56 | +1.26 | +2.61% |
“It can’t be expected that established vehicle manufacturers, who need to make similar investments that a start-up would in vehicle design and manufacturing facilities, could turn a profit immediately,” said Sam Fiorani, vice president at research firm AutoForecast Solutions.
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An EV price war between Tesla and other automakers is expected to squeeze automakers’ profit margins. (Photo by PATRICK T. FALLON/AFP via Getty Images / Getty Images)
Legacy American carmakers are also seeing their EV ambitions being throttled by cutthroat competition from Chinese EV makers and Tesla, which have triggered a price war globally.
GM last week declined to reiterate its previously announced forecast that it would have one million units of EV production capacity in North America by the end of 2025.
Ford had also outlined plans to use a Canadian plant it had earmarked for a future electric vehicle to instead build larger, gasoline-powered versions of its flagship F-Series pickup truck.
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Ford is expected to post a 10% quarterly drop in profits due to shifting consumer preferences in EVs and the CDK cyberattack on dealerships’ software. (REUTERS/Francois Lenoir / Reuters Photos)
Ford previously said it would delay the launch of its new three-row EVs that would be built at its assembly complex in Oakville, Ontario to 2027 from 2025. Both Detroit…
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