Although revenue rose to $35.76 billion, a 5% increase from the second quarter of last year, net income fell from $2.84 billion to $1.69 billion, according to a Tuesday press release. The automaker’s earnings report indicates high demand amid supply constraints that prevent consumers from receiving new cars.
“The customers are there for our vehicles,” CEO Mary Barra told analysts, per The Wall Street Journal. “They’ve been waiting, and all indications are they remain ready to buy.”
Among other automakers, GM has been troubled by the low availability of semiconductors. Many Asian economies enforced harsh lockdown measures in response to COVID, causing bottlenecks in the global semiconductor supply chain that have lasted for more than two years. Earlier this year, computer chip shortages led GM to pause production for two weeks at a facility in Fort Wayne, Indiana, that assembles pickup trucks such as the Chevrolet Silverado and the GMC Sierra.
“There is still uncertainty and unpredictability in the semiconductor supply base, and we are actively working with our suppliers to mitigate potential issues moving forward,” GM said at the time, per the Associated Press.
In response to the supply chain issues, lawmakers have proposed the $52 billion CHIPS for America Act to incentivize new semiconductor production in the United States — but because the funding has not yet reached chipmakers, companies such as Intel, TSMC, and GlobalFoundries recently issued “public warnings” that they might start new production in Europe and Asia, according to the Department of Commerce. Supply chain issues have contributed to inflationary pressures in the market for new and used vehicles, for which costs have respectively risen by 11.4% and 7.1% since June 2021.
GM’s profits have plummeted despite an array of favors from the White House. Most recently, the Biden administration’s Department of Energy announced that it would provide the company with a $2.5 billion loan to finance the construction of new electric battery facilities in Ohio, Tennessee, and Michigan, according to a report from Reuters.
Last year, President Joe Biden visited an electric car factory operated by GM after the automaker paid nearly $160,000 to the brother of a White House staffer. According to a report from Washington Free Beacon reporter Matthew Foldi, lobbyist Jeff Ricchetti — the brother of Steve Ricchetti, who serves as counselor to the president and worked as chief of staff to the vice president from 2013 to 2017 — has earned significant sums from the company since Biden’s inauguration.
GM announced earlier this month that it would manufacture the 2024 Chevrolet Blazer in Ramos Arizpe, Mexico, where the gas-powered version of the car is presently assembled. Versions of the electric vehicle will sell for between $45,000 and $66,000 and have a range of up to 320 miles. The expansion outside of the United States provoked mockery from Tesla CEO Elon Musk, who called his cars the “most made-in-USA vehicles.”
Indeed, President Biden has frequently lauded GM and Ford amid their efforts to expand electric vehicle offerings — yet has consistently decided to turn a blind eye to Tesla, the world’s largest electric vehicle maker, due to its lack of unionization.