General Motors CEO, Mary Barra, believes that a slower approach to electric vehicle production in North America will be more lucrative in the long term. Suppliers familiar with GM’s plans through 2025 suggest that the automaker is taking its time with electric vehicle investment and production while still profiting from its traditional combustion engine pickups and SUVs.
According to data from AutoForecast Solutions, GM intends to produce only 170,000 EVs in the US, Canada, and Mexico in 2023 and 285,000 in 2024, with production expected to remain under 500,000 in 2025, which is half of its capacity of 1 million.
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This year, GM is launching four new EVs, including one pickup and three SUVs, with four more planned for 2024. However, most of these vehicles will be produced in low volumes through 2025. The automaker has already secured the battery materials required to manufacture 1 million EVs per year in North America by 2025. In comparison, Tesla has announced a $3.6 billion investment to expand its Nevada battery plant to support 2 million vehicles annually.
GM is building three battery plants in the US with partner LG Energy Solution, with plans for a fourth factory yet to be announced. On the other hand, Ford has reduced prices for its Mustang Mach-E electric SUV by up to 8% and aims to sell 600,000 EVs annually by the end of 2023, with production capacity for its F-150 Lightning electric pickup set to increase to 150,000 vehicles per year by this fall.
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GM’s cautious approach could potentially shield the company from the price war initiated by Tesla earlier this month. The automaker’s shares rose more than 7% as investors appeared to support its approach and financial forecasts.
Barra reported strong orders for GM’s new EVs, such as the GMC Hummer pickup and SUV, the Cadillac Lyriq, and the electric Chevrolet Silverado pickup, and stated that the company will work to avoid discounts by keeping a tighter hold on vehicle inventories. Production of the latest EVs is ramping up slowly, with just 122 Cadillac Lyriq SUVs and 854 Hummer pickups delivered last year. The Hummer SUV is set to enter production this week, with the division already sold out through next year.
