Last Thursday, General Motors CEO Mary Barra confirmed the company would continue pursuing its EV ambitions, but acknowledged a number of obstacles remain in its path.
Speaking to virtual attendees of Wolfe Global Auto, Auto Tech, and Auto Consumer Conference, Barra and GM CFO Paul Jacobson spoke positively about upcoming developments in the company’s electrification strategy. Both spoke excitedly of upcoming additions to the brand’s EV lineup in 2023, and noted that a partnership arranged with LG Energy Solution had already served to reduce manufacturing costs.
However, GM’s leadership also seemed keenly aware of the issues hampering their EV ambitions. Barra noted that the brand would be keeping its electric car prices between $30,000 and $40,000 to stoke consumer demand, which is suffering from a looming affordability crisis. However, these relatively low prices come at the cost profit margins, which are already strained by the great expense of EV battery production. When questioned if she expected a $40,000 sale to earn a 20% profit margin, Barra answered, “We aren’t anywhere near where we think we can get the cost of the battery cell down.” Barra and Jacobson also tempered expectations for the first quarter, noting that COVID lockdowns in China were likely to disrupt GM’s operations.
Still, the brand’s electrification strategy seems to have matured since its reveal. Barra, in contrast to some of her previous statements on the future of EVs, took a more nuanced stance at the conference. “(Are) EVs a good business? The answer is yes. But we see it as growth in the interim.” Although Barra formerly predicted that GM’s EV lineup would be profitable by 2025, it remains unclear if the goalposts have shifted to allow for this “interim” period to end naturally.
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