According to him, supply chain constraints will not hinder the electric vehicle maker's goal of achieving profitability by 2025.
“GM expects its EV portfolio to have a similar margin profile to its internal combustion engine portfolio over the next three years after factoring in US tax credits on cars and trucks,” said General Motors CEO Mary Barra.
The automaker hopes to generate more than $50 billion from sales of its 30 EV models by 2025, with low to mid-single-digit profit margins.
Meanwhile, investors have been skeptical of GM's promises, citing macro hurdles such as rising battery raw material costs.
Meanwhile, GM's executive vice president of global product development, purchasing and supply chain, Doug Parks, acknowledged the costs could jeopardize GM's targets.
However, thanks to increased efficiencies from the GM Ultium EV platform and supply chain agreements, it should at least reduce the macro impact.
“GM has entered into a binding agreement to secure battery materials to support 1 million unit annual capacity in North America by 2025,” Parks said.
Additionally, GM has made strategic investments in Queensland Pacific Metals for processing of cobalt and nickel in Australia, as well as a long-term agreement with Vale for sourcing and processing of high-grade nickel in Canada.
Later, Parks added that GM has price controls in place for lithium that will dampen the volatility and pricing the market has seen over the last year.
He noted the new clean energy tax credit would help GM speed up its process of creating a domestic supply chain for electric vehicles in North America.
“The credit is very much in line with the strategy we have pursued over the past several years and will allow us to increase our footprint domestically with our Free Trade Agreement partners,” said Parks.
Beyond battery cells, Parks revealed that GM has long-term supply agreements with key suppliers of EV drivetrain components.