GM’s EV sales momentum is finally building

WARREN, Mich. – If everything has gone to plan for General Motors over the last three years, the Detroit automaker will be well on its way to catch up Tesla in the sale of electric vehicles.

In October 2021, GM CEO Mary Barra announced that the automaker will “absolutely” capture the US EV lead by 2025. However, after slower-than-anticipated EV adoption in the industry and GM’s unique challenges with production, software and supply chains, the company stays away from car maker Elon Musk, as well as Hyundai Motor/Kia and Ford Motor District

While GM has canceled most of its previously announced electric vehicle targets, the automaker believes EV sales momentum is finally building thanks to its all-electric vehicle lineup — priced from about $35,000 to more than $300,000.

“We’re definitely outpacing the industry in terms of growth, in terms of EVs,” Rory Harvey, GM’s president of global markets, including North America, told CNBC. “We have the most comprehensive lineup of EVs of any manufacturer in the industry, in the U.S., today.”

EV sales data provided to CNBC by the Detroit automaker, which generally reports monthly sales, showed a significant increase for GM through August. GM sold nearly 21,000 EVs in the U.S. in July and August — nearly matching second-quarter EV sales. GM’s EV sales through August are up about 70% compared to the previous year.

“This is a step change in terms of our EV performance,” Harvey said in an interview this month at GM’s Cadillac headquarters in suburban Detroit.

Two months of back-to-back records for EVs GM has been within striking distance – about 2,000 units – from Ford until August. It still remains more than 20,000 units shy of Hyundai / Kia EV sales over the past month. Ford and Hyundai/Kia report monthly sales.

The legacy automaker is still fighting for a distant second to Tesla, which Motor Intelligence estimates has sold more than 164,000 EVs during the second quarter — roughly double the combined sales of GM, Hyundai/Kia and Ford during the same period.

Harvey declined to speculate when, or if, GM expects to overtake rivals in EV sales, but the automaker has forecast a strong finish for the end of the year.

“We have momentum on our side,” Harvey said. “We anticipate the fourth quarter will be strong in terms of EV adoption. So, we’re looking forward to that close, and looking forward to taking a disproportionate share of the up.”

GM now offers eight “Ultium-based” EVs to consumers – sharing electric vehicle architecture and battery technology.

They range from mainstream models such as the Chevy Equinox and Blazer crossover to three large pickup trucks and luxury models from Cadillac, including the $300,000 Celestiq. Two additional Cadillac vehicles — the electric Escalade and the entry-level Optiq crossover — are expected to join the lineup by the end of the year, bringing the total to an industry-leading 10.

“They’re doing what they say they’re going to do. The plan is to have Ultium and it’s going to be under a lot of cars very quickly,” said Stephanie Brinley, principal automotive analyst at S&P Global. “It’s not coming online as fast as we’d like. But that’s the plan.”

For comparison, five Tesla vehicles range from the Model 3 sedan for about $39,000 to the more than $100,000 Cybertruck. Hyundai, which includes its luxury brand Genesis and sibling Kia, has a lineup of nine cars and crossovers ranging from $34,000 for the electric Hyundai Kona to $80,000 for the Genesis G80.

With so many GM models, expectations for increased sales are high. Automakers have spent billions of dollars developing these vehicles, and now “the pressure is on to sell,” Brinley said.

“The pressure is on being able to navigate consumer demand and meet it,” he said. “But it’s 10 to 15 years to get to a place where EVs will be more dominant than (internal combustion engines), and it will still take time for consumers to warm up.”

Cox Automotive expects EVs to account for about 10% of total US vehicle sales by the end of the year, up from 7.3% in the first quarter.

Selling more EVs is still somewhat counterintuitive for GM: They remain less profitable than other gas-powered models, but the automaker expects EVs to be profitable on a production, or contribution margin basis, once they reach an output of 200,000 units in the fourth quarter. a quarter.

EVs, which also help companies meet strict federal fuel economy standards, have been a key growth area for Barra. The CEO has not canceled the goal announced in January 2021 that the automaker will offer all-electric vehicles to consumers by 2035.

Harvey told CNBC that the automaker is “doing a good amount right now in terms of roadshows, in terms of getting customers into our vehicles, making sure the fleet in our dealerships has the right level of EVs.”

“In the U.S., you say, ‘Butts in the seat sell a car,’ in England, we say, ‘Feel the steering wheel, seal the deal,'” said Harvey, a native of England. “But it’s the same thing.”

The 2035 target, which Barra said will be guided by customer demand, is a transformational goal for GM. The Detroit automaker is the first legacy automaker to go “all-in” on EVs and is restructuring its business to focus on the vehicle, including announcing several other targets it has withdrawn or adjusted.

Targets drawn for 2025 include North American production capacity of 1 million EVs and EV profitability comparable to gas models. The status of other targets, such as $50 billion in revenue from all-electric vehicles next year, is unclear.

GM is maintaining a closer target of producing between 200,000 and 250,000 EVs this year, a revised range down from its previously announced target of 200,000 to 300,000.

Harvey said the company will continue to be guided by customer demand for EVs.

“You have to plan a few years ahead of what you’re going to do,” Harvey said. “If you reach some peaks and drops when you pass, then we have the ability to either increase production or to slightly detune production, so that we can meet customer demand. I don’t think we have overinvested in EVs.