Why GM’s All-Electric Future Is A Big Gamble

TL;DR

GM’s all-electric future is a big gamble because it plans to stop selling gas-burning cars despite uncertain EV demand, intense competition, and persistent range, cost, and charging challenges. GM aspires to eliminate tailpipe emissions from new light-duty vehicles by 2035, introduce 30 EVs by 2025, and invest $35 billion in electric and autonomous vehicles. Read on to see how batteries, market forecasts, and GM’s shrinking market share shape the risk.

Transcript

In January 2021, General Motors made a stunning announcement. It aspires to eliminate tailpipe emissions from new light duty vehicles by 2035, meaning that GM intends to stop selling gas burning cars. GM executives have made announcements over the past several years touting the carmakers commitment to an all electric future. Of course, rivals such ... Read More

Key Insights

• 🌱 General Motors' plan to go all-electric by 2035 is an ambitious goal that aims to eliminate tailpipe emissions.
• 🚙 Concerns about consumer skepticism, vehicle range, cost, and charging infrastructure remain obstacles to widespread electric vehicle adoption.
• 🚙 GM's investment in electric and autonomous vehicles highlights its commitment to the transition.
• 🧑‍🏭 The success of GM's plan will heavily depend on factors such as infrastructure development and overcoming customer barriers.
• 💄 GM's Ultium battery cells, developed in partnership with LG Chem, offer cost reduction and increased capacity, making EVs more price-competitive.
• 🤩 GM's focus on crossovers, SUVs, and trucks leverages its strength in these segments and targets popular vehicle choices among consumers.
• 🚙 Reviving the Hummer brand and introducing vehicles like the Cadillac Lyriq showcase GM's efforts to attract a wide range of customers to electric vehicles.

Questions & Answers

Q: Why is GM’s all-electric future a big gamble?

GM plans to stop selling gas-burning cars even though EVs represented just 2% of new-car sales in 2020. If electric vehicles reach only 31.6% to 45% of worldwide light-vehicle sales by 2035, GM could lose global market share unless it captures a massive portion of the EV market.

Q: What is GM’s plan for eliminating tailpipe emissions?

GM aspires to eliminate tailpipe emissions from new light-duty vehicles by 2035, meaning it intends to stop selling gas-burning cars. Executives describe the emission-free plan as a goal rather than a guarantee.

Q: How many electric vehicles does GM plan to introduce by 2025?

GM plans to introduce 30 electric vehicles by 2025. Its planned lineup includes crossovers, cars, SUVs, and trucks from all four of its US brands.

Q: How much is GM investing in electric and autonomous vehicles through 2025?

GM was expected to spend $27 billion on electric and autonomous vehicles through 2025, but it increased that investment to $35 billion. It also shifted engineers and other resources from traditional powertrains to batteries, motors, power electronics, and vehicle-control software.

Q: What obstacles could prevent widespread adoption of GM electric vehicles?

Consumers remain concerned about vehicle range, cost, and charging infrastructure. EV charging takes much longer than filling a gas tank, and many areas have relatively few charging stations compared with gas stations.

Q: What are GM Ultium batteries, and how could they support its EV strategy?

Ultium cells are newly designed GM batteries developed in partnership with LG Chem. GM says it has dramatically reduced battery costs while improving capacity, and the companies plan to produce the batteries through a $2.3 billion partnership.

Q: Which electric vehicles and commercial services are part of GM’s strategy?

As of August 2021, the Chevrolet Bolt EV and Bolt EUV were GM’s only pure EVs sold in the US, while upcoming vehicles included a Cadillac crossover and an electric Hummer sport utility truck. GM’s BrightDrop venture adds vehicles, equipment, and services for electric commercial fleets, with FedEx as its first customer.

Q: How do EV market forecasts and GM’s market share affect the plan?

One forecast projected battery electric vehicles at 31.6% of worldwide light-vehicle sales and 28.5% in North America by 2035, while another projected a 45% worldwide share. GM held about 8.7% of the global automotive market in 2020, and its US share fell from 22.1% in 2008 to 17.1% in 2020, increasing the pressure to win a large share of EV sales.

Summary & Key Takeaways

• General Motors plans to eliminate tailpipe emissions from new light-duty vehicles by 2035, pushing the market forward.

• The company intends to introduce 30 electric vehicles by 2025, emphasizing its commitment to an all-electric future.

• While GM's plan is ambitious, concerns about consumer skepticism, vehicle range, cost, and charging infrastructure remain.