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A Look at GM’s Massive Electric Vehicle Expansion Strategy

March 23, 2021 by Shannon Cuthrell

General Motors plans to eliminate tailpipe emissions from new light-duty vehicles by 2035 and achieve carbon neutrality by 2040. At the same time, it’s fueling billions of dollars into an ambitious electric vehicle development strategy.

Just over a year ago, General Motors announced plans to sell 1 million electric vehicles per year by 2025. Last November, the Detroit-headquartered auto giant upped its EV and AV investment to $27 billion from $20 billion pre-pandemic. It aims to release 30 all-electric vehicle models globally by 2025, representing 40% of its U.S. models. 

 


General Motors’ Detroit-Hamtramck Assembly Plant undergoes construction as a part of the company’s $2.2 billion overhaul to convert the facility into an EV-exclusive assembly plant. (Photo by Jeffrey Sauger, General Motors)
General Motors’ Detroit-Hamtramck Assembly Plant undergoes construction as a part of the company’s $2.2 billion overhaul to convert the facility into an EV-exclusive assembly plant. (Photo by Jeffrey Sauger, General Motors)

In January, the company announced plans to transition its global products and operations to carbon neutrality by 2040 and eliminate tailpipe emissions from new light vehicles by 2035. More than 50% of overall capital spending and product development will focus on electric and autonomous vehicles, GM says. 

The announcement noted that while EVs do not emit tailpipe emissions, “it is critical that they be charged with electricity generated from renewable sources like wind and solar.” GM says it’s working with utilities and developers to build renewable energy systems for its production facilities. 

On the EV charging front, GM is working with EVgo to add 2,700 renewable energy-powered fast chargers to its nationwide charging network by the end of 2025. This would triple EVgo’s existing network of over 800 charging stations. 

GM’s EV plans will centralize in the company’s newly rebranded Factory ZERO, an all-electric vehicle assembly plant it calls “the launchpad for GM’s multi-brand EV strategy.”

GM’s goals are ambitious, to be sure, but do they align with its current momentum in the EV space? And what role will it play in the global EV market? 

First, let’s look at national and global market demand and sales performance: 

In 2019, IHS Markit projected that U.S. demand for EVs and hybrids would surpass 1.28 million by 2026. Dominated by Tesla, 48 brands would sell 16.8 million vehicles overall, or 350,000 sales per brand, but pure electric and hybrid vehicles would only account for 7.6% of sales. 

 

Chart via Edison Electric Institute, October 2019 EV Sales Report
Chart via Edison Electric Institute, October 2019 EV Sales Report

 

In 2020, global EV sales quadrupled that of the U.S. market, according to a recent report from Canalys. Around 1.3 million units were sold in China and Europe, yielding a 39% increase in global EV sales year-on-year. Meanwhile, U.S. EV sales accounted for just 2.4% of all new cars sold. Overall, the total passenger car market saw a 14% drop, representing 66.5 million vehicles, though EVs made up 5% of all new car sales last year. 

With a 17.3% share of the U.S. auto market by vehicle sales, GM has a decent stake in the game. Already, research shows it has sold between 200,000 to 300,000 EVs globally in the last few years. 

In total, GM sold more than 2.5 million vehicles in the U.S. last year, according to data from GM Authority. Its single EV product, the Chevrolet Bolt EV, sold 20,754 units in 2020, a 26.4% jump from 16,418 in 2019. Cumulatively, that works out to nearly 80,000 Chevrolet Bolt EVs sold since its launch in 2017. 

The Chevrolet Bolt finished out 2020 strong, with fourth-quarter deliveries increasing 103% year-over-year to around 6,700.

 

Chart via InsideEVs

 

In its 2020 earnings report, GM stated it will prioritize speed to market as it prepares 30 new EVs to launch in the U.S. and China by 2025. Meanwhile, it says the global semiconductor shortage will only have a short-term impact on production, earnings and cash flow this year. 

 

A simulated image of the upcoming Cadillac LYRIQ, planned for 2022. Image via Cadillac
 

GM expects sales for its new 2022 Chevrolet Bolt EUV to kick off this summer. Later this year, it will launch its GMC HUMMER EV powered by its Ultium battery platform, and production will begin on its BrightDrop EV600 commercial van. In early 2022, GM will begin production for its Cadillac LYRIQ luxury EV, as well.