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.

Robotaxi Costs

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.”

To contact the reporter on this story: David Welch in Southfield at dwelch12@bloomberg.net.

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Anne Riley Moffat

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