A century-old carmaker plans to beat Elon Musk at his own game.
Yesterday (Oct. 6), General Motors (GM) told investors it plans to take the lead in electric vehicle (EV) sales in the US. Part of this ambitious plan hinges on releasing a new electric SUV priced at about $30,000—more than $10,000 cheaper than the cheapest Tesla, the Model 3 sedan. GM did not share a timeline for this but it seems plausible, especially given that Tesla routinely hikes prices.
Along with the affordable price tag, GM’s top brass believes a slew of other factors like customer loyalty, strong manufacturing capacity, and a wide dealership network, will also help lure would-be Tesla users.
The Detroit-headquartered firm, which declared bankruptcy in 2009 and cost the US government $50 billion to bail out, is eyeing “an all-electric future” by 2035. It has 30 new EV launches planned within the next four years and by the end of this decade, more than 50% of GM’s North American and Chinese plants will be “capable” of building EVs.
Wall Street appears to share GM’s confidence—GM stock rallies on any EV news from the company.
GM’s tech push
The automaker, which aims to more than double revenue to $280 billion by 2030, is also determined to become a tech company. Late last year, it announced plans to hire 3,000 workers in engineering and software positions to further this ambition.
GM’s first-generation advanced driver-assist system (ADAS), Super Cruise, which debuted in the Cadillac CT6 sedan in 2017, has been touted as a safer, more capable version of Tesla’s Autopilot. However, it only covers 200,000 miles of roads in the US and Canada. But a new, more sophisticated hands-free system called Ultra Cruise—ultra is always better than super—that GM plans to release in 2023 will cover more than 2 million miles.
Furthermore, the company recently announced an end-to-end software platform, Ultify, which will power several subscription-based in-car services. It can detect the weather, or automatically trigger the car’s child locks, among other things.
As part of its big EV push, GM has also been working on lowering the cost and increasing the driving range of batteries. Its second-generation Ultium battery is already a massive improvement on the first version unveiled eight months ago, delivering twice the energy density at half the price. Additionally, the company just invested in a 300,000-square-foot battery research facility.
But GM has had a rough time with EVs. Since November 2020, there’s been a massive recall of all 150,000 Chevrolet Bolts—GM’s only all-electric vehicle over rare battery defects. At least 12 of the vehicles had caught fire, and one reportedly spread to a Maserati and Hyundai in a parking lot in Sacramento, California.
Tesla’s reign
Dethroning Tesla won’t come easy. The firm, founded in 2003, is now valued at around $800 billion—10 times GM’s valuation—and is a consumer favorite.
The 10 most popular electric vehicle models sold in the US over 2017, 2018, and 2019 had total combined unit sales of 568,000, and Tesla’s vehicles comprised more than two-thirds of them.
Besides stiff competition from Tesla, there are several other hiccups GM could face: EVs remain pricier than gas-powered vehicles; charging points do not become ubiquitous; and supply suffers due to chip shortages.
This piece has been updated to include information about the Chevrolet Bolt recall.