Shares of General Motors (NYSE:GM) jumped nearly 9% in early trading Tuesday after management revealed an upbeat outlook for 2024 and signaled that more capital will be returned to shareholders.
GM CEO Marry Barra highlighted strategies aimed at giving back cash to shareholders, such as a $12 billion allocation in 2023 through a $10 billion share buyback and a 33% dividend increase.
"Our priority is to return cash to our shareholders," stated Barra. The 2024 outlook for GM anticipates a free cash flow ranging from $8 billion to $10 billion, predominantly stemming from the company's ICE vehicles.
GM is banking on robust demand for its combustion trucks and SUVs in North America, coupled with cost-cutting measures and the increasing sales of its next-generation electric vehicles, following a shortfall in 2023 deliveries compared to earlier projections. GM anticipates a surge in overall EV sales this year, aiming to capture 10% of the U.S. market, up from 7% in 2023.
In a strategic shift, Barra revealed that GM will introduce plug-in hybrid vehicles in North America, departing from its previous approach of avoiding hybrid powertrains in this market. This decision aligns with the upward trend in U.S. hybrid sales, driven by consumer resistance to high EV prices and challenges in recharging infrastructure.
Acknowledging the non-linear growth of the EV market, CFO Paul Jacobson assured analysts that GM is ready to adapt.
"We know the EV market is not going to grow linearly," said CFO Paul Jacobson. "We are prepared to flex between ICE and EV production."
Shares of GM are up 6.64% in mid-day trading on Tuesday.