GM’s CEO Says the Company Is Playing the ‘Long Game’ With Electric Vehicles
GM remains far behind competitors in the EV race, but is counting on its propietary battery pack technology to catch up.
Written by Allison Stone
Reviewed by Kathleen Flear
In 2021, GM made waves throughout the automotive industry when it announced a goal to end sales of gas-powered vehicles completely by 2035, but seems to be struggling to keep up with
other manufacturers
who are further along. A year later and GM remains far behind its competitors. With fewer than 500 electric vehicles sold in the first quarter of 2022, it appears that GM might not be the industry leader it set itself up to be, but executives like Mary Barra remain unphased.
GM wants to make electric cars affordable
According to the
New York Times
, GM plans to refine its carmaking process with affordability and accessibility at the forefront and target future car buyers rather than those who are investing in electric cars early. EVs accounted for just 3 percent of car sales last year, so there is still plenty of room for growth in the industry. As the industry expands, GM wants to take advantage of those drivers who have not yet been won over by electric cars.
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GM’s plan for the future of electric vehicles
On a grander scale, electric cars are still in their infancy in terms of mainstream adoption. When asked about GM’s strategy, Barra said GM is playing “the long game” and is “here to win.” GM’s goal is to produce over one million EVs in North America annually by 2026.
The crux of this strategy is GM’s proprietary battery pack that is has spent five years designing. Marketed under the name Ultium, the battery packs are made of modular components that can be fitted to any GM vehicle.
Unlike other brands that primarily outsource their battery packs or invest in platform sharing, GM is seeking to eventually wield a great cost advantage over its competitors via its modular battery packs.
The company is also in the process of building four new factories in partnership with LG Electric. The main purpose of these new factories will be to mass-produce battery packs to lower costs.
The first battery plant is being built in Lordstown, Ohio and will begin producing Ultium packs later this year. The other three plan to start production in the next three consecutive years.
Who is buying EVs?
Electric cars are slowly becoming more mainstream and affordable, but Barra noted that most EVs sold in the United States last year were luxury models purchased by people who already owned at least two cars. GM’s current EV offerings are in line with that trend, including the electric GMC Hummer pickup and the Cadillac Lyriq, but Barra has a vision to target a different demographic.
“If you want E.V.s to get to 100 percent or even 50 percent of the market, there have to be affordable E.V.s,” said Barra as reported by the New York Times. “You’ve got to provide entry models in that space.”
While GM’s strategy could yield serious profits in theory, it doesn’t come without certain risk. Building out an electric brand is still somewhat uncharted territory, and it’s not something thats going to happen overnight.
Apple has been shelving and reviving its electric car plan since 2014. Many in the auto industry have closely watched Tesla’s rocky ramp up over the past 20 years as the company first neared bankruptcy in 2008 and again from 2017 to 2019 while making the Model 3.
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