General Motors goes even further on electric vehicles, forecasting spending of $ 27 billion
General Motors (NYSE: GM) said it is increasing its investment in electric vehicles (EVs) as it prepares to bring more battery-powered vehicles to market, faster.
Speaking at a conference hosted by Barclays on Thursday, CEO Mary Barra said GM now plans to spend more than $ 27 billion to bring a slew of new all-electric vehicles to market – 30 in its global portfolio of ‘by the middle of the decade. That’s up from the $ 20 billion he said he would spend when he shared the details of his new Ultium battery technology in March, just before the start of the coronavirus pandemic in the United States
Not all of those 30 EVs will be sold in the U.S. market, but many will: more than two-thirds of the total, Barra said. In other words, GM now expects 40% of its U.S. models to be battery-electric vehicles by the end of 2025.
The strengths of GM’s accelerated EV plan
Here are the key points presented by Barra and GM Product Manager Doug Parks on Thursday:
- GM has stepped up development programs for 12 of its future electric vehicles, including the GMC Hummer EV and Cadillac Lyriq crossover. The Lyriq is now expected to launch in the first quarter of 2022, nine months ahead of its previous schedule.
- GM now plans to launch a total of 30 new electric vehicles around the world by 2025. Each of GM’s four US brands – Buick, Cadillac, Chevrolet and GMC – will get at least two battery-electric models.
- All of these vehicles will use GM’s proprietary Ultium batteries and powertrains. Engineering work in recent months has increased the maximum range of vehicles powered by Ultium batteries from 400 miles to 450 miles.
- The automaker will spend more than half of its capital spending on electric vehicles and autonomous driving programs.
- GM is already testing prototypes of the next generation of Ultium batteries. He expects the second-generation battery to deliver twice the energy density of its current batteries, at half the cost. These second-generation batteries will not require significant changes to the architecture of the company’s electric vehicles, Parks said.
While GM will produce Ultium batteries in joint venture with Korean battery giant LG Chem, it does most of the research and development itself at its technical center in Warren, Michigan. The company will launch a new lab and manufacturing facility for second-generation Ultium cells in Michigan in 2021, Parks said.
What we know about the next 12 GM electric vehicles
The 12 electric vehicle launches that have been moved include:
- Four Ultium-based products for the GMC brand, including the Hummer EV and an electric pickup truck;
- Four electric vehicles for Chevrolet, including a pickup and a compact crossover SUV; and
- Four Cadillacs, including the Lyriq.
One or two of the Chevrolet models will likely be based on the current Bolt EV rather than the new Ultium technology. (We know that GM has a crossover version of the Bolt coming soon.) Parks said there are also two electric vehicles for Buick in the works, with more in development for markets outside of the United States (think China).
Including all of its battery-electric models worldwide, GM expects to sell about 1 million electric vehicles per year by the middle of the decade, Parks said.
GM hopes investors will pay close attention
Why is GM stepping up its electric vehicle efforts? For starters, the company thinks it’s the right thing to do.
“Climate change is real,” Barra said. “We want to be part of the solution by putting everyone in an electric vehicle.”
But there is more to it. Barra, with a lot of auto investors, would like the market to recognize that GM has the expertise, resources, technology and intention to be a leader in the emerging electric vehicle market. While GM has made impressive progress in its electric vehicle efforts, its assessment has fallen behind far behind start-ups and new entrants in the automotive industry with much less expertise and manufacturing capacity.
Among the things the market may underestimate: GM promises that its Ultium-based electric vehicles will pay off from the start.
“The all-electric future we’re building incorporates everything we do better than anyone else, so we can put everyone in an EV, drive profitable growth and create shareholder value,” said Barra.
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