GM Meets Renewable Energy Targets Early via Sourcing Agreements
Detroit-based car giant General Motors (GM) says it has secured enough sourcing agreements to meet its renewable targets across all U.S. facilities by 2025.
General Motors (GM) recently announced it completed all the agreements needed to meet its goal of sourcing 100 percent renewable energy by 2025. It has been just over a year since the Michigan auto giant advanced those plans from its previous 2030 target. Overall, the news marks a 25-year advance on its initial 2050 goal set in 2016.
GM is investing heavily in attaining its renewable energy goals. Image used courtesy of Wikimedia Commons
More specifically, GM says it secured sourcing agreements with 16 renewable energy plants spanning 10 states, adding that its renewable portfolio now tops $75 million of positive cash flows since 2017.
In its recent announcement, GM said the new sourcing agreements will offset one million metric tons of emissions that would have otherwise been produced from 2025 to 2030, equivalent to burning one billion pounds of coal. Besides securing enough battery raw material to sustain its supply chain, the company is investing in natural resource recovery, processing, and recycling.
The latest announcement reflects GM’s long-term renewable energy strategy, centered around lowering the amount of energy consumed at its facilities. The channels it uses to meet that goal include direct investments, green tariffs, on-site generation, and power purchase agreements.
As it decarbonizes its U.S. facilities, GM aims to reach carbon neutrality across its global operations by 2040. On the development front, it plans to eliminate tailpipe emissions from all new U.S.-sold light-duty vehicles by 2035.
GM Production Expansion in Sync with Record Sales
Overall, GM is investing $35 billion in electric vehicle development through 2025, aiming to reach more than one million units of EV capacity per year in North America and China by late 2025. It has already secured enough battery raw material to reach this milestone in the United States, increasing its manufacturing footprint across several states. It’s spending $760 million on transforming its propulsion manufacturing plant in Toledo, Ohio, into a facility designed for EV production.
The current lineup of EVs offered under GM’s Chevrolet brand. Image used courtesy of Chevrolet
Anticipating heightened demand for its Ultium battery platform and the EVs running on it, GM is adding future cell plants in Spring Hill, Tennessee (opening mid-2023) and Lansing, Michigan (late 2024). Those facilities would join GM’s new battery cell facility in Warren, Ohio, which kicked off production earlier in 2022. Under its Ultium Cells LLC joint venture with South Korean battery maker LG Energy Solution, GM is currently eyeing a site in Indiana for its fourth battery facility. In total, GM is targeting 160 gigawatt-hours of capacity across its four planned battery cell plants.
EV investments appear to be paying off for GM. Its GM North America (GMNA) subsidiary closed the third quarter with record EV sales and quarterly revenue, along with an 85 percent increase in wholesale volume year-over-year. In her letter to shareholders recently, Teresa Barra, GM chief executive officer, wrote that record sales of the Chevrolet Bolt EV and Bolt EUV earned the company more than 8 percent of the American EV market. The pair of popular EVs claimed about 14,700 of GMNA’s 15,200 EV sales in the most recent quarter.
The Chevrolet Bolt is GM’s most popular electric vehicle. Image used courtesy of Chevrolet
Beyond the consumer end market, GM also anticipates growth in its commercial EV segment. According to its third-quarter earnings deck, GM’s BrightDrop brand secured 25,000 electric van reservations and letters of intent from companies such as Walmart, Verizon, FedEx, and Kroger. BrightDrop is expected to hit a capacity of 30,000 electric vans in 2023.
As the company expands its EV lineup and manufacturing capacity, reservations are maxing out for its newer models. The GMC HUMMER EV has more than 90,000 reservations across the SUT and SUV models, while the Cadillac LYRIQ is currently in production with sold-out orders. The Silverado EV, available in spring 2023, has 170,000 reservations.
In 2023, GM will launch its Chevrolet Blazer and Equinox EVs and Cadillac CELESTIQ luxury EV, while the GMC Sierra EV will be made available in early 2024.
Updated as of December 7, 2022: More than one million EVs are now traveling America’s roads, and by 2030 that total will skyrocket to around 18 million. This projection comes from the Edison Electric Institute and a recent PR Newswire article. To operate a gas-powered vehicle costs $1,117 per year, while the annual operation cost for an EV comes to $485.