General Motors’ electric vehicles allegedly still have a long way to go until they make the company any money. A presentation for GM’s investor day Thursday reportedly leaked early and will detail the uphill battle the Detroit automaker is facing in terms of profitability for its ambitious line of EVs. As first reported by Bloomberg, the company’s CEO Mary Barra will tell investors Thursday its EVs won’t be profitable until 2025.
By that date, the company aims to sell 1 million EVs a year. Until then, it’s set to sell around 44,000 in 2022—reportedly at a loss. Its ICE business is expected to keep funding the losses and other technological developments in the meantime. Even once the electric vehicles break even, Barra reportedly notes that EVs won’t be as profitable as gas-powered cars.
The automaker’s presentation allegedly says it plans to lower costs in order to make up for profit shortfalls. Even its Ultium batteries are 60% cheaper than those found in the Chevy Bolt. The second generation of Ultium will be as much as 40% cheaper than the current generation, according to the automaker. The timeline for the arrival of these batteries was set at “the next several years.” Details including the chemistry of these new Ultium batteries were not stated.
We reached out to GM to confirm the validity of the report but a spokesperson for the automaker declined to comment.
GM wants to become the leading producer of EVs in the world. Its plans are ambitious, but it’s building the lineup and infrastructure in order to complete that goal. GM’s plans to beat crosstown-rival Ford hinges on its highly scalable platform; Ford beat GM to market in key segments but also does not share parts as GM does. By sharing a large number of expensive components like entire battery packs, drive units, and other power electronics, the GM is planning to reach success through high volume as opposed to high margins. As such, it’s already built one battery cell manufacturing plant in Ohio with LG and plans two more.
The automaker’s electric lineup is also growing slowly but surely. It currently offers the Hummer EV pickup, Cadillac Lyriq, two versions of the Chevy Bolt, and delivery vehicles through BrightDrop. It will soon offer several more EVs including the Blazer EV, Equinox EV, Silverado EV, and more. The company also has more vehicles in the pipeline that are yet to be announced. A mid-sized Hummer might be on the way and more EVs under the Cadillac brand are likely to join the Lyriq and recently announced Celestiq. Buick will be a fully electric automaker as well.
Add into the mix the amount of money the company plans to make on in-car software purchases and the entire picture isn’t so gloomy. That is, of course, assuming the automaker continues to offer valuable services like Super Cruise in exchange for a subscription fee as opposed to something like heated seats. In order to double revenue like GM plans to, it’s going to have to go light on the gimmicks.
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