It is no secret that electric cars stay a lot more costly to create than conventional ICE models but General Motors believes its EVs will turn into lucrative by the second half of 2024.

The carmaker cites a handful of causes as to why it will quickly quit losing funds on each and every and every single EV that it builds. According to chief economic officer Paul Jacobson, this contains enhanced production volume, a a lot more favorable automobile mix, and the reduction in battery fees. The latter will prove especially critical.

Jacobson told attendees at a current Barclays investor conference that the scaling of the firm’s joint-venture battery plants is going to lower its reliance on imported battery cells which are costlier. Additionally, the firm will be in a position to decrease its raw material fees by more than $four,000 per automobile from this year to 2024. Aiding in GM’s path to EV profitability will be greenhouse gas credits, federal tax credits, its BrightDrop and GM Energy firms, and digital and software program-enabled solutions, Auto News reports.

With this in thoughts, Jacobson believes GM’s pretax EV margins will enhance by a minimum of six-tenths of a point in 2024 from this year. This will get the firm to a constructive variable profit on its EVs in the second half of 2024 prior to increasing to mid-single-digit margins the following year with the advantage of tax credits, Auto News reports.

Read: All Ultium-Based GM EVs Will Be Able To Power Your Home By 2026

“It’s no secret that at the end of the day, our EBIT [EV] margins are substantially negative,” Jacobson stated. “We’re building for the future. So as we continue to ramp up, we’re going to see pretty significant benefits going forward.”

While GM is confident that its EVs will quickly turn into lucrative, it is not all very good news for clients. In October, chief executive Mary Barra revealed that the launches of the Chevrolet Equinox EV, Chevrolet Silverado EV RST, and GMC Sierra EV Denali have all been pushed back by a handful of months. This news came shortly right after GM revealed that production of the a lot more inexpensive Silverado and Sierra EVs variants had been pushed back from 2024 to late 2025 in element due to “evolving EV demand.”