Automotive: GM Suffers Massive Financial Hit after Spending a Fortune on EVs

Want a car that can take you on a road trip across the country, can fill up in minutes rather than hours, and can drive more than a hundred or so miles at a time?

Well, then an electric vehicle isn’t for you unless you splurge on one of the high-end Tesla models, as those might have the range and “supercharge” capacity to make a road trip in one slightly less miserable and time-consuming.

GM learned that lesson in a particularly painful way, with its recent earnings report showing that, amid its huge investment in the electric vehicle space and push to produce more of those cars, it suffered a 40% net earnings plummet in the second quarter of 2022 compared to 2021. In fact, the car manufacturer reported a net income of $1.69 billion for April through June, which was down a whopping $1.15 billion from $2.84 billion in the same April through June period of 2021. Yikes.

Is General Motors Chair and CEO Mary Barra leading GM to financial ruin chasing the flawed tree hugger dream? (Photo by Steve Fecht for General Motors)

GM’s falling profits come amid its push to produce more EVs, a goal supported by the Biden administration and its climate plans, according to a White House press release. In 2021, GM and other American automakers set a goal to have electric vehicles comprise 40% to 50% of total sales in the U.S. by 2030.

Yet worse is that a major issue making it even harder (and more expensive) to produce those EVs that it intends on making isn’t letting up: the supply of minerals necessary to produce the high-tech cars is limited at best, as one energy policy expert told the Daily Caller, saying:

“Consider the scrambling going on now with EVs still under 10% of car sales and well under 1% of the installed global car fleet.”

“As every car maker chases the same (limited) pool of minerals, no one has a plan to supply enough. There won’t be enough for everyone.”

Perhaps the car company should focus on producing cars profitably rather than chasing rare minerals necessary for building high-tech golf carts around the globe so that it can participate in the latest “current thing” and take serious profitability hits while doing so.