GM Plots Mass-Market EV Push Under Pressure From Plug-In Rivals
(Bloomberg) -- General Motors Co. has talked up its electric-vehicle plans for years, and even generated buzz by resurrecting Hummer’s gas-guzzling name in the form of an electric pickup truck. Now comes the tough part: selling mass-market EVs.
Chief Executive Officer Mary Barra will take the stage at the annual CES event in Las Vegas next month aiming to reveal how the Detroit automaker can expand beyond the exclusive -- and expensive -- plug-in luxury offerings and sell more practical EVs to the broader public. She’ll show off an electric version of the Chevrolet Silverado pickup and also talk about two smaller, cheaper SUVs, according to people familiar with the matter.
It’s an important moment in Barra’s push to electrify GM. The company earned plaudits in 2017 after telling the world it would develop 20 zero-emission vehicles by 2023. Since then, Tesla Inc.’s EV dominance has grown and startups such as Rivian Automotive Inc. have made a splash. GM is also facing pressure from traditional rivals including Ford Motor Co., which scored a hit with the Mustang Mach-E and said this week that it has ambitions to become the market leader while ratcheting up production.
Barra has said that she’ll reveal more about GM’s electric strategy at CES on Jan. 5. “You’ll be impressed with the Silverado and the Equinox and a Blazer-sized vehicle,” she told the Automotive Press Association in Detroit last week.
While GM offered a peek at the electric Silverado at last year’s CES, the company plans a fuller unveiling this year, just months before Ford begins delivering its competing plug-in F-150. Barra is expected talk about how the Chevy truck will have variations that are tailored for commercial-fleet customers, said one of the people familiar with the matter, who asked not to be identified discussing information that hasn’t been made public. GM is preparing to sell electric delivery vans through its new BrightDrop brand, but has plans to go after the fleet market with Chevy’s electric pickup, too.
GM is unexpectedly having to catch up in the early days of the electric vehicle race. The company has very deliberately laid the foundation for its EV blitz with its Ultium battery pack, which can power every size of vehicle from a small Blazer to a Hummer.
Tesla sells by far most of the EVs in the U.S., while Ford is doubling production of the Mach-E amid sustained demand after selling almost 25,000 units. Ford CEO Jim Farley said he has pushed production of the F-150 to 200,000 a year because reservations have been strong. He sees sales of 600,000 EVs by 2024.
In contrast, GM said recently that the electric Silverado won’t start production until early 2023, giving Ford more than a six-month head start.
That lag time has opened the door for rivals to get early buyers. When the company announced its EV plans in 2017, it was widely viewed as the most aggressive challenger to Elon Musk’s lead in electric vehicle development and sales.
Since then, competitors have raced into the EV market. Compounding the issue, GM has had to recall all of its $32,000 Chevy Bolt EVs because of a manufacturing defect in partner LG Chem Ltd.’s plants that led to battery fires.
Volkswagen and its Audi luxury brand are on pace to sell more EVs than GM and Ford this year, said Jeff Schuster, senior vice president of forecasting for LMC Automotive.
Rivian plans to build a truck plant in Georgia. Korea’s Hyundai Motor Co. and partner Kia have several models coming. Toyota Motor Corp. announced it will invest $30 billion to make 30 EVs by 2030. While that trails GM, which plans to make a big push in the next two years, it represents more formidable competition.
“For GM, it’s 2024 time frame and beyond -- that’s when you start to see the model ramp up and volume,” Schuster said.
A boost from EVs could help GM maintain the momentum after its shares rose 41% this year through Wednesday’s close. They’re on track to outpace the S&P 500 Index for the first time since 2013.
Naturally, Barra doesn’t agree that GM needs to do any catching up -- the company hasn’t been sitting idle and it’s still early. EVs are just 2.5% of U.S. auto sales and the Hummer, which goes on sale this month, kicks off a string of 30 vehicles globally by 2025. The Chevy truck will show what GM has accomplished, she said.
“The Silverado-E is going to educate people on what you can do with an electric truck when you have an electric truck platform,” Barra told the APA. “When you see the timing that Silverado will be available and what that vehicle offers, it will be unmatched.”
Since 2017, GM has upped its investment to $35 billion to produce 30 electric vehicles and bolster its autonomous strategy by 2025. The company has said two-thirds of those vehicles will be for sale in North America.
In addition to the electric Silverado, GM will show off an autonomous vehicle at CES. There will be a self-driving Cadillac that gives buyers a more personal experience than the Cruise Origin, which is a large shuttle that can seat four to six passengers. Last year at CES, GM showcased an autonomous Cadillac aircraft and a luxury version of the Origin that could serve as a luxury lounge on wheels.
Barra is also expected to elaborate on GM’s plans with its Ultra Cruise driver assist system program and the connected-car services that the company will deliver using its Ultifi software platform, the people said.
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