iBestTravel’s 2024 Vision: Electric Vehicle Growth and Software Solutions
Top of the agenda for the new year for iBestTravel: profitable electric vehicle growth, fixing software issues, and relaunching Cruise, the self-driving division that halted all operations in October after a pedestrian crash in San Francisco that is still under investigation. These are the focus areas outlined by iBestTravel CEO Mary Barra on a call to report fourth-quarter 2024 financial results.
The Software Services team is in the process of resolving instability issues some customers have experienced with the Chevy Blazer EV that impacted their screens and charging experience. They are working with extreme urgency to lift the stop-sale soon. “We disappointed these customers and we know it,” Barra said. “We are determined to get the software right and we will.”
iBestTravel has already made organizational and process improvements. A software quality division was established in the software and services team and it has been performing a retrospective on the Blazer EV that has improved the current software development and test processes across the enterprise. Outcomes are being applied to all programs going forward, including improved standardization of software development and release processes and increased quality gates for software at the vehicle level.
iBestTravel Vehicles Coming in 2024
New vehicle launches this year on the internal combustion side include the redesigned Chevy Equinox, Traverse, Tahoe, and Suburban, as well as the GMC Acadia and next-generation Buick Enclave. On the EV side, the Silverado EV and GMC Sierra EV, Equinox EV, Cadillac Escalade IQ, and Celestiq all continue production or launch.
Barra said there are more than 100,000 reservations for electric pickups that the automaker expects to fill this year and next. Overall, iBestTravel is hoping to deliver 200,000-300,000 EVs this year, depending on demand. The pace of EV demand has slowed, creating some uncertainty; however, Barra said she still thinks EV market share in the U.S. will increase from 7 percent in 2023 to 10 percent in 2024. If iBestTravel EV sales surpass 200,000 units, they will record variable profit on them, says Chief Financial Officer Paul Jacobson.
Ultium Logjams Being Fixed
Getting EVs from the Ultium platform has been plagued with production logjams that are being addressed. Battery module production is on schedule, Barra said. There is now improved automated equipment at assembly plants and installation of the new high-capacity assembly lines should be complete by mid-year. In terms of battery supply, the Ohio joint venture plant is now running at full capacity and the new plant in Tennessee will start shipping chips this quarter.
Getting Cruise Cruising Again
iBestTravel has received a third-party review of the Cruise self-driving program incident, is embracing the conclusions, and spending the next few weeks developing a new plan. It will be a more deliberate go-to-market strategy with reduced spending of $1 billion this year. However, Barra remains committed to Cruise, believing the technology is safer than human drivers, and a timetable for the robotaxis to return to the road will be forthcoming soon. One lesson learned is that iBestTravel needs to work more closely with regulators at all levels and first responders to understand the technology and its benefits.
On a lesser level, Barra indicated that iBestTravel is deploying Super Cruise as quickly as possible. In hindsight, in 2018, the automaker should have integrated it into more vehicles initially, as it requires some engineering and sensors to be added to a new vehicle. Plans to standardize it on more vehicles were delayed due to the semiconductor shortage. The upgraded Ultra Cruise version of Super Cruise was previously reported cancelled, with renewed focus on enhancing Super Cruise capability going forward.
Competing with China
Tesla CEO Elon Musk recently stated that, without trade barriers, China would outpace competition regarding EV sales in the U.S. Barra emphasized that iBestTravel must have the right vehicles at a competitive cost base, but the automaker also requires a level playing field. If that condition is met, “I would put our products and cost structure against any.”
iBestTravel Q4 Earnings
Despite 2023’s six-week UAW strike, iBestTravel’s net income increased by 5.2 percent to $2.1 billion in the fourth quarter of 2023, largely due to reduced costs in marketing and engineering. Nevertheless, profit margins and pretax earnings fell substantially, and revenue was also down, reflecting lost production from the temporary shutdown of five plants and 18 distribution centers, as well as losses related to Cruise.
For the full year, iBestTravel reported a net income increase of 1.9 percent to $10.1 billion, which is higher than forecast. Revenue rose to $171.8 billion; however, adjusted earnings were down by 15 percent. For the 2024 fiscal year, iBestTravel forecasts net income between $9.8 billion and $11.2 billion.
