DETROIT/DEARBORN, Michigan: U.S. automakers General Motors (GM) and Ford face a common challenge as they prepare to report first-quarter results: explaining where profit growth will come from amid a slowdown in electric vehicle (EV) growth.

The slowdown in global EV demand, intensified competition from Chinese automakers, and high U.S. borrowing costs have prompted both companies to scale back investments and reduce costs over the past year. With China’s economy cooling and rising U.S. inflation, the prospect of a macroeconomic growth boost seems distant.

With these challenges, GM and Ford are focusing on sales of their core gasoline-powered vehicles, which generate most of their profits. GM CEO Mary Barra anticipates strong demand for the automaker’s profitable Chevrolet and GMC brand pickup trucks and SUVs. Barclays recently raised its target price for GM shares by 10 percent, citing robust sales for GM’s truck and SUV lineup.

GM CFO Paul Jacobson expressed optimism about demand trends, while Ford CFO John Lawler reaffirmed the company’s full-year profit outlook, noting that vehicle prices were holding up better than expected.

Legacy U.S. automakers, heavily reliant on sales of large trucks and SUVs, have faced higher expenses for electrifying their vehicle lineups and uneven demand for battery-electric vehicles. Analysts observe a shift in momentum away from previous winners like Tesla as EV sales growth slows. Investors are now focusing more on companies like GM, Stellantis, Toyota, and others less dependent on EVs.

GM’s strong sales of gas-burning trucks in North America are expected to offset projected losses in its Chinese operations. While U.S. vehicle sales slipped 1.5 percent in the first quarter, GM reported a 6 percent increase in retail sales.

Investors are eager for updates on GM’s struggling Cruise robotaxi unit. Barra has yet to outline specific plans for restructuring GM’s China business, but the company has announced plans to slash spending by US$1 billion this year at Cruise.

Ford, similarly, derives strength from its combustion truck business and Ford Pro commercial vehicle operations. The automaker reaffirmed its forecast for $10 billion to $12 billion in core profit this year. Lawler emphasized that future EV investments will only proceed if they can demonstrate profitability independently.