GM Sees Path to Elusive EV Profits, 1 Million Sales a Year
(Bloomberg) -- General Motors Co. is forecasting it will sell 1 million electric vehicles per year by 2026 and thinks it can do what Tesla Inc. hasn’t -- sell them at a profit.
The cost of the cells in new batteries GM has in the works will drop to less than $100 per kilowatt hour, from $145 in the Chevrolet Bolt, Chief Executive Officer Mary Barra said Wednesday. Getting the cost below that mark is crucial to profitability, with researcher IHS Markit estimating that’s when battery-powered autos can be competitive price-wise with gasoline-powered models.
“We believe we are leading the industry in battery development,” Barra said at the Barclays Global Automotive Conference in New York. “We are planning for a future electric vehicle portfolio that will be profitable.”
Barra’s presentation is the latest occasion GM has used to make the case it’s prepared for a future where consumers increasingly purchase electric cars and pay for transportation by the mile rather than own their vehicles. As the more than century-old automaker has revealed more about its strategy for battery-powered and self-driving cars, interest in the stock has climbed.
GM elaborated on a plan announced last month to build out its global offerings of greener vehicles by adding 20 all-electric vehicles by 2023. Barra’s presentation showed that GM will be selling seven different electric sport utility vehicles, two passenger cars and a commercial van.
The presentation also teased a shared self-driving vehicle. Rather than be sold, the company will use the vehicle in some kind of mobility service, spokesman Ray Wert said.
GM has been experimenting with different ride-hailing services through its Maven unit and with San Francisco-based Cruise Automation, the self-driving vehicle development company it acquired in 2016. Cruise is testing an app that lets its employees summon a self-driving Chevrolet Bolt as the automaker explores a potential robotaxi business.
For such a venture to have mass appeal to riders, GM will need to get costs below $1 per mile, Barra said. Right now, costs are more like $2 to $3 per mile, she said.
“True volume will be unlocked when you get the cost under $1 a mile,” Barra said. “We see a path to getting under $1 in the medium term.”
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