General Motors expects its new electric vehicles to be in-line with traditional cars and trucks with internal combustion engines by mid-decade.
GM CEO Mary Barra on Thursday said the significant increase in profits factors in federal incentives under the Biden administration’s Inflation Reduction Act
That timeframe is years ahead of schedule and what many expected was possible.
General Motors expects its new electric vehicles to be in-line with traditional cars and trucks with internal combustion engines by 2025 – years ahead of schedule and what many expected was possible.
GM CEO Mary Barra on Thursday said the significant increase in profits factors in federal incentives under the Biden administration’s Inflation Reduction Act, which includes money back for companies that produce EVs in North America as well as consumers and fleet customers that purchase the vehicles.
“It’s clear these credits are going to help usher in a new era of technology innovation and job creation that’s going to achieve what was intended,” Barra said during an investor day in New York. “It will be good for the American economy. It’ll be good for American families. It’ll be good for the environment, and frankly, General Motors is well poised.”
Near-term profitability plans for EVs as well as its outlooks for the economy and business during a period of rising interest rates, surging inflation and recessionary fears were expected to be focus points for investors and analysts during the event in New York.
GM is bullish on its profits and plans regarding EVs largely thanks to its investments in recent years on a new vehicle platform called Ultium as well as ongoing construction of domestic plants through a joint venture called Ultium Cells LLC with LG Energy Solution.
The joint venture is expected to be operating plants in Ohio, Tennessee and Michigan by the end of 2024, which would make the company a leader in domestic cell production; a fourth U.S. cell plant is planned.
Wells Fargo Colin M. Langan is “skeptical” that GM’s electric vehicles can be sustainably profitable by 2025, even with incentives in the Biden administration’s Inflation Reduction Act. He said pricing and raw material assumptions will be key.
“At the last Investor Day, GM promised ICE-like EV margins by 2030. Since then, battery raw material costs have dramatically spiked; therefore, it would be surprising if GM can still see EV profitability by 2025,” Langan wrote Tuesday.
GM previously said it secured binding commitments for all the battery raw material it needs to deliver its 2025 electric vehicle capacity target of 1 million vehicles. The company also has plans for capacity of 1 million EVs in China by then as well.
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