General Motors is expected to manufacture 1 million electric cars by 2025
Strong profits are a key factor allowing the company to spend billions on the electric vehicle business
The company will have no excuses this year as semiconductor supplies improve
Mary Barra, CEO of General Motors, said that the current year will see the company overtake its traditional competitors and begin attempts to reduce the gap between it and Tesla in the race to manufacture electric cars.
This is the long-awaited installment. For four years, GM has been talking about 30 new electric car models that will use the company's Altium batteries, but only recently started production. Depending on these batteries, the company will introduce 7 new electric cars this year, including the four-wheel drive "Cadillac Lyric" and "Chevrolet Blazer" and the "Chevrolet Silverado" truck.
Barra believes that General Motors will overtake traditional rival Ford Motors in electric vehicle sales and begin to capture the market that Tesla has dominated for the past decade.
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"This is the year we launched," Barra said in an interview, stressing, "I believe, I am absolutely certain that this will be our year as a result of the products that we have and the demand that we have seen."
Fateful year
Barra enters a fateful year in her tenure at the helm of America's largest automaker. By August, Barra will be the longest-serving General Motors CEO since the legendary David Sloan stepped down from the role in 1956, having held the position since 1946. Barra's push into electric vehicles accelerated in the first quarter of this year and will build even further over the next year. General Motors plans to make 1 million electric cars by 2025, and could outpace Tesla, according to Bank of America forecasts.
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General Motors will have no excuses this year as semiconductor supplies improve, so the company should be able to boost sales of both its conventional and electric vehicles.
The Ohio-based battery plant, operated by Ultium Cells LLC, will boost production by 20% quarterly, supplying electric vehicle assembly plants. General Motors has pledged to raise electric vehicle sales revenue to $50 billion by 2025 through profitable methods.
The company sold less than 40,000 electric cars last year, ending up in third place after “Tesla” and “Ford”, as the compact “Chevrolet Bolt” accounted for almost all of General Motors’ sales of hybrid cars that rely on technology from previous generation. Tesla is set to remain the leader in electric vehicle sales this year with nearly 427,000 vehicles sold, according to research firm LMC Automotive, which also expects General Motors to overtake Ford and outsell 117 thousand cars.
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"The traditional automakers are making progress, but they still have a long way to go to catch up to Tesla sales," Kevin Riddell, an analyst at LMC, said via email.
A long way
General Motors decided to take the long road to electric vehicles by building its own battery pack and electric vehicle platform rather than taking a shortcut with converted internal combustion equipment. As a result, Tesla maintained its massive edge, while Ford also outperformed its traditional rival. Both Koreas, Hyundai Motor and Kia, have registered their presence in the electric car market.
Still, this delay offers some advantages. All of GM's competitors are running on their own version of the Altium batteries, which GM uses in everything from the Chevy Equinox electric SUV to All the way to the Hummer EV that weighs up to 9,000 lbs.
The company now has more flexibility and battery production is growing especially now that the platform is ready. In contrast, competitors have mostly converted existing conventional car platforms to fit batteries, which could be a differentiating factor for GM.
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GM's strong earnings over the past year, and an expected repeat in 2023, is a key factor allowing the company to spend billions on its electric vehicle business. Last Thursday, Barra pledged that the company would achieve its financial goals this year, which include profits before interest and taxes amounting to $12.5 billion, noting that the company achieved its target in 2022.
"Nobody believed in us when we said we were going to hit our targets...nobody said we were going to hit our targets but we did," Barra told investors, at a recent conference held by Wolfe Research in New York.
"cruise" goals
This year will also be fateful for Cruise, the self-driving car unit of General Motors. Cruise charges rides in self-driving cars in San Francisco, Phoenix, and Austin, Texas. The company has placed a request to increase service hours in San Francisco and may be looking to expand to other cities. The company aims to achieve revenues of up to $1 billion in 2025 and increase total fares to $50 billion by the end of the decade.
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Despite this, General Motors incurs $2 billion a year because of the Cruise unit, not to mention some errors that cause traffic problems. The company's safety record remains good, but it could take years to start turning a profit.
Barra said the company will continue to fund the Cruise unit, as well as its plans to expand its robo-taxi business into freight and car delivery.
T self-driving. She added, "General Motors" has no plans to seek external financing at this time.
"General Motors currently has no problem with financing... We are very committed to Cruze, it is a very important part of our future," said Barra.
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However, Parra's ambitions for 2023 could face some complications as a result of the US economic recession. Barra said that "General Motors" is closely monitoring the economic situation and planning for various scenarios, but demand is still strong so far.
She also stated, "We are still receiving relatively strong demand. We are still seeing demand for our more luxury trucks and SUVs.. We are planning conservatively, but we are currently recording high demand from the United States."
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