After electric vehicles (EVs) lost General Motors (GM) $1.7 billion in 2023, the automaker is now saying these models became variable profit positive in 2024. While this marks progress for the company’s electric offerings, true profitability still has not been achieved.

What does this news mean for GM?

“We doubled our EV market share over the course of the year as we scaled production, and our portfolio became variable profit positive in the fourth quarter,” GM CEO Mary Barra said in a letter to shareholders announcing the news. “We’re targeting further improvements in EV profitability as we continue to scale.”

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Variable profit positive means revenue from sales exceeded the fixed costs of production, such as labor and materials. However, this does not account for some major expenses like assembly line construction.

When had GM anticipated its EV division would become profitable?

GM previously projected its EV division would be “solidly profitable” by 2025. Last year, Barra made an even more aggressive forecast, stating the company would start making money on EVs by the end of 2024.

However, the expansion of GM’s EV sales may face challenges as the political landscape in the U.S. shifts. The Trump administration proposed eliminating EV incentives and imposing tariffs on Mexico and Canada, two key manufacturing hubs for the automaker.

What happens next?

Despite these possible hurdles, GM has remained optimistic about the future of its EV business. The company said it has plans for navigating any potential tariffs imposed by the White House and is continuing to expand its electric lineup.