General Motors Profits Fuel Transition to Electrification

With the company in a strong financial position, General Motors is planning to accelerate the transition to battery-electric vehicles and push ahead with the development of robotaxis and other autonomous vehicles, Chairman and CEO Mary Barra says.  

Barra says the GMC Hummer BEV is now in the market. Cadillac Lyriq deliveries begin in less than 60 days, and additional BrightDrop EV600 production begins late this year at GM’s CAMI plant in Ingersoll, ON, Canada, with annual capacity of 30,000 units and the ability to double production by mid-decade, she says. 

Barra says the Chevrolet Silverado BEV launches next spring and the Chevrolet Equinox and Blazer BEVs will also reach the market in 2023. “We have the teams working to accelerate the volume curves for all these launches and to resume both (Chevrolet) Bolt EV and EUV production as soon as possible,” Barra says during a conference call with analysts and journalists to discuss financial reports for fourth-quarter and full-year 2021. 

“We have set a target to deliver 400,000 EVs in North America over the course of 2022 and 2023,” Barra says. GM recently announced additional battery cell and assembly capacity investments in Michigan that will give the automaker more than 1 million units of EV capacity in North America by the end of 2025, including 600,000 fullsize trucks.  

The North American capacity is in addition to more than 1 million units of BEV capacity in China, the CEO adds. 

GM BrightDropEV600-FedEx_0

“I can tell you right now, 1 million units in North America won't be enough to meet the steep inflection in demand that we expect starting mid-decade for our EVs,” Barra says. “That's why we will continue to convert (internal-combustion-engine) capacity to EVs and plan to invest in a third EV truck plant. We are formulating plans for the truck plant right now and we will share more as we work through the details.” 

Battery-cell availability will not be a constraint to GM’s long-term BEV growth, she says.  

“Our Ultium Cells JVs in Ohio and Tennessee come online in 2022 and 2023, respectively. And we will add capacity as demand grows. Our Ohio plant will launch with seven-day operations, adding 10% capacity and 200 jobs. Cell production in Michigan is scheduled to begin in late 2024,” Barra says, adding GM will announce the location of its fourth U.S. cell plant in the first half of this year.  

Growing customer demand for the first wave of battery-electric products supports GM’s investments, she says. “We already have more than 59,000 reservations for the GMC Hummer EV pickup and SUV. Not surprisingly, some of the first owners are very prominent figures in the sports and entertainment industries, and their initial feedback has been just incredible. They expected a super truck, and they got one.” 

More than 110,000 Silverado BEVs have been reserved so far, including reservations from more than 240 fleet operators, Barra says. In addition, the Equinox BEV will have a $30,000 sticker price. “The efficiencies created by the Ultium platform are a key reason why we will be able to deliver truly affordable EVs like the Equinox,” Barra says.  

Affordable battery-electrics are a part of the market that start-ups aren't targeting, but they are key to driving mass adoption of BEVs. “That's why we plan to follow the Equinox with an even more affordable EV,” she says. 

GM also will launch redesigns of the Silverado and GMC Sierra 1500 pickups and offer them with Super Cruise Level 2 autonomy with expanded capabilities that include lane change on demand and hands-free trailering, which GM expects to bring additional revenue to the company. 

Barra says GM is not now reinstating a dividend on its common stock at this time even with the prospect of continued strong earnings and robust cash flow. 

Paul Jacobson, GM’s chief financial officer, says cash from the company’s profitability is funding the transformation. “We see a path to doubling revenue by 2030, while expanding margins with significant opportunities in software, services and new businesses in electric and autonomous vehicles,” he says. 

For the full year, the automaker generated $127 billion in revenue, $14.3 billion in EBIT-adjusted, 11.3% EBIT-adjusted margin and $2.6 billion in adjusted automotive free cash flow. 

GM expects production to increase 25% to 30% year-over-year in 2022, with most of the increase occurring in the second half of the year thanks to a steady supply of semiconductors, Jacobson says. 

Chevrolet Silverado-EV 24