General Motors is investing tens of billions of dollars to produce a variety of new electric vehicles and hopes to catch up with Tesla.
But the automaker seems a long way from meeting those ambitious goals. This year, the company is struggling to produce a new type of electric car battery pack for the electric vehicles it plans to launch in the next few years.
“It was a bit of a challenge,” the company’s chief financial officer, Paul Jacobson, said on a conference call with reporters Monday afternoon.
In the first half of this year, GM built just 50,000 electric vehicles, and most of them used an older battery pack from a supplier. In the United States, GM sold fewer than 2,800 vehicles that used its new Ultium modular battery packs, which were manufactured at an Ohio factory the company co-owns with LG Energy Solution. Two more Ultium factories are under construction, in Tennessee and Michigan.
GM once said it plans to produce 400,000 electric vehicles in North America from 2022 to 2024 and more than a million by 2025, the vast majority of which should use Ultium technology.
Mr. Jacobson said the company expects to manufacture 100,000 battery-powered vehicles in the second half of 2023 and will provide more information on the production plans in a conference call with financial analysts on Tuesday.
Currently, the sluggish rollout is not hurting the company’s bottom line. GM announced on Tuesday that the company posted profits of $2.6 billion for April through June, up 52 percent from a year earlier. Revenue was $44.7 billion, up 25 percent.
Mr Jacobson said the company has benefited from higher prices and strong sales of trucks and sport utility vehicles in North America. The average price of vehicles sold by GM in the second quarter was $52,000 — about $1,600 more than in the first quarter of the year.
GM sold 833,000 cars and trucks in North America in the second quarter, up 26 percent from a year earlier. 147,000 vehicles were sold in the rest of the world, around 8,000 fewer than a year earlier.
While strong earnings are encouraging, many investors are increasingly concerned about the company’s EV strategy given that EVs are the fastest-growing segment of the auto industry.
A major fear for investors is that GM, Ford Motor, and other big automakers could quickly lose customers as more motorists buy battery-powered cars. In China, Europe and California, where electric vehicles already account for a significant and growing share of new car sales, once-dominant automakers like Volkswagen and Toyota have lost market share to Tesla and Chinese automakers like BYD.
Two years ago, GM CEO Mary T. Barra said the company aims to double annual sales to about $280 billion by 2030. Much of the increased business is said to come from electric vehicles and new revenue streams from software and services related to those cars and trucks. The company has also set a goal of ending production of internal combustion engine models by 2035.
Right now, GM is “far from where it should be,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a consulting firm. “If they struggle with the first wave of these new electric vehicles and can’t get them to market, that doesn’t bode well for the next wave of higher volume models.”
GM currently offers few niche vehicles that use Ultium battery packs. These include the Cadillac Lyriq, an SUV; the GMC Hummer, which starts at around $90,000; and large vans made by a new division called BrightDrop.
This summer and fall, GM is slated to add three electric Chevrolets — the Blazer and Equinox SUVs, and a Silverado electric pickup. The company had previously announced that the Silverado would go on sale in the spring, but now the truck is not expected until the fall.
