Mary Barra, chair and CEO of GM, speaks during the unveiling of the Cadillac Celestiq electric sedan in Los Angeles on October 17, 2022.
Frederic J. Brown | AFP | Getty Images
WARREN, Mich. – If everything had gone according to plan for General Motors In the last three years, the Detroit-based carmaker has been well on its way to Tesla in the sale of electric vehicles.
In October 2021, GM CEO Mary Barra said the automaker would “absolutely” catch up with the U.S. leader in electric vehicles by 2025. Instead, the company remains far behind Elon Musk’s automaker, Hyundai Motor/Kia and Tesla, after a slower-than-expected rollout of electric vehicles across the industry and GM-specific challenges in production, software and supply chains. Ford engine.
While GM has withdrawn most of its previously announced electric vehicle targets, the automaker believes its electric vehicle sales are finally picking up thanks to a growing lineup of all-electric vehicles, which range in price from about $35,000 to more than $300,000.
“We are definitely outpacing the industry in terms of electric vehicle growth,” Rory Harvey, GM's president of global markets, including North America, told CNBC. “We currently have the most comprehensive electric vehicle lineup of any manufacturer in the industry in the U.S.”
Electric vehicle sales figures provided to CNBC by the Detroit-based automaker, which releases its sales figures quarterly, show a significant increase for GM through August. GM sold nearly 21,000 electric vehicles in the U.S. in July and August — almost as many as in the second quarter. GM's electric vehicle sales through August were up about 70% year-over-year.
“This is a game-changer in the performance of our electric vehicles,” Harvey said this month in an interview at GM's Cadillac headquarters in a Detroit suburb.
Those two consecutive record months for GM's electric vehicles have brought the company within striking distance of Ford (about 2,000 units) through August. However, through last month, Hyundai/Kia's electric vehicle sales still lagged by more than 20,000 units. Both Ford and Hyundai/Kia report their sales figures monthly.
The established automakers are still battling for second place behind Tesla, which Motor Intelligence estimates sold more than 164,000 electric vehicles in the second quarter – about twice as many as GM, Hyundai/Kia and Ford combined sold during that period.
Harvey declined to speculate on whether and when GM plans to overtake its competitors in electric car sales, but predicts a strong end-of-year spurt.
“We have momentum on our side,” Harvey said. “We expect the fourth quarter to be strong in terms of electric vehicle adoption, so we're looking forward to finishing that and getting a disproportionate share of the recovery.”
Growing range of electric vehicles
GM currently offers consumers eight “Ultium-based” electric vehicles – which refers to the architecture of its electric vehicles and its battery technologies.
They range from mainstream models like the Chevy Equinox and Blazer crossovers to three large pickup trucks and luxury models from Cadillac, including a custom-built Celestiq for $300,000. Two more Cadillac vehicles – an electric Escalade and an entry-level Optiq crossover – are expected to join the lineup by year's end, bringing the total to an industry-leading 10.
“They're doing what they said they would do. Their plan was to have Ultium and get it in a lot of cars relatively quickly,” said Stephanie Brinley, senior automotive analyst at S&P Global. “It didn't come online quite as quickly as they wanted. But that was the plan.”
Cadillac Escalade IQ (model year 2025)
Michael Wayland / CNBC
By comparison, Tesla's five vehicles range from the Model 3 sedan, which costs around $39,000, to the Cybertruck, which costs over $100,000. Hyundai, including its luxury brand Genesis and its sister model Kia, has a range of nine cars and crossovers, ranging from around $34,000 for the Hyundai Kona Electric to $80,000 for the Genesis G80.
Given GM's large number of models, expectations for increased sales are high. The automaker has invested billions of dollars in developing the vehicles, and now “the pressure is on to sell them,” Brinley said.
“The pressure is great to be able to manage and satisfy consumer demand,” she said. “But it will take 10 to 15 years before we get to a point where electric vehicles will be more dominant than [internal combustion engines]and it may take some time for consumers to warm up.”
Cox Automotive expects electric vehicles to account for about 10% of total U.S. vehicle sales by the end of the year, up from 7.3% in the first quarter.
The all-electric Blazer EV from Chevrolet.
Scott Mlyn | CNBC
Selling more electric vehicles still seems counterintuitive for GM: They are still far less profitable than other gasoline-powered models, but the automaker expects electric vehicles to be profitable on a production or contribution margin basis once it reaches 200,000 units in the fourth quarter.
Electric vehicles, which also help the company meet tighter federal fuel economy standards, are a key growth area under Barra. The CEO has not fully backtracked on his goal, announced in January 2021, that the automaker would offer exclusively all-electric vehicles to consumers by 2035.
Harvey told CNBC that the automaker is “doing a tremendous amount right now in terms of roadshow events to get customers into our vehicles and make sure our dealer fleets have the right number of electric vehicles.”
“In the US they say 'butt in the seat sells cars', in the UK we say 'feel behind the wheel seals the deal',” says Harvey, a native of Britain. “But it's the same thing.”
EV Targets
The 2035 target, which Barra said will be based on customer demand, was a transformative one for GM. The Detroit automaker was the first established automaker to go all-electric and redesigned its business to focus on those vehicles, including announcing several other targets that have since been withdrawn or adjusted.
The withdrawn 2025 goals include a North American production capacity of 1 million electric vehicles and profits from electric vehicles comparable to those of gasoline models. The status of other goals, such as $50 billion in sales from pure electric vehicles by next year, is unclear.
GM is sticking to its short-term goal of producing between 200,000 and 250,000 electric vehicles this year, a range revised downward from the previously announced target of 200,000 to 300,000.
Harvey said the company will continue to focus on customer demand for electric vehicles.
“You have to plan several years in advance what you're going to do,” Harvey said. “As we get into peaks and dips over time, we have the ability to either increase production or slightly reduce it so we can meet customer demand. I don't think we've overinvested in electric vehicles.”
Comments are closed.