GM CFO Paul Jacobson said the automaker expects cash flow to be “substantially better” in 2027 than in 2026 after completing most of its electric-vehicle restructuring.
Comments at the All Stars Conference
Jacobson made the remarks Wednesday at the U.S. All Stars Conference hosted by J.P. Morgan. He answered questions from Rajat Gupta, head of equity research for autos at JPMorgan, about the company’s transformation plan.
Describing his approach, Jacobson said, “I’m an old school CFO. I believe cash is king and at the end of the day, it’s super important to really drive that cash generation in the business and transfer it and make it pass all the way through to free cash flow through disciplined capital expenditures.”
Progress on EV restructuring
The restructuring of GM’s EV segment began in the latter part of 2025. For the quarter ended June 30, the company recorded $2.3 billion in incremental charges, which Jacobson said “substantially complete” the material charges expected from right-sizing EV capacity.
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Since the second half of 2025, the automaker has logged $10.9 billion in EV-related charges, according to CFO Dive previously reported. Those costs are now largely behind the automaker as it moves toward a leaner EV production footprint.
Jacobson, who has served as GM’s CFO since 2020, highlighted that free cash flow has risen from an average of about $3 billion in the first half of the decade to more than $10 billion in the last five years.
He attributed the improvement to a focused vehicle portfolio and a disciplined capital-allocation strategy, noting that the balance sheet is arguably stronger than it’s been in decades and that the company is investing in models that will dazzle customers three to six years out.
Financial outlook and market context
For the full year 2026, the automaker projects adjusted automotive free cash flow between $9.5 billion and $11.5 billion, as disclosed in its July 21 second-quarter earnings release.
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Industry data show weakening demand for new EVs. Ford and Honda have scaled back or dropped planned EV models, and a Cox Automotive report dated Sept. 15 noted a 2.5% month-over-month rise in new EV sales in August, but a 47% year-over-year decline to 78,895 units.
Used EV sales painted a different picture, climbing nearly 26% month-over-month and 14.7% year-over-year in the same period, according to the same Cox analysis.
Jacobson emphasized cash flow as a buffer against economic pressure, saying cash flow is the #1 insulating layer against a downturn and that maintaining positive free cash flow through a downturn would be his ultimate goal.
He said that while he doesn’t wish for a recession, it is like a final exam in college or university, and you should be ready for it.
