General Motors CEO Mary Barra has made a bold pledge to investors that the automaker will earn money selling electric vehicles by 2021.
What Barra has not described in detail is how GM plans to do what, until now, no significant automaker has done.
The response is a big bet on combining proprietary battery innovation, an inexpensive, flexible vehicle design and high-volume production primarily in China, according to six current and previous GM and supplier executives and six market specialists interviewed by Reuters.
If GM can meet Barra’s enthusiastic profitability target, then it will house two different companies by the mid-2020s: A traditional focus in North America on trucks, sport utility vehicles and cars fueled with petroleum, and a worldwide electric automobile company focused in China, branching into pay-per-use services such as robotaxis.
Barra’s pledge to make a profit is a bold claim in a market sector that has been driven more by government policy than consumer demand, and where Tesla Inc – the world’s largest electric-vehicle producer – is burning through over $1 billion in cash each quarter offering premium-priced vehicles.
Barra and GM have invested greatly in the electrification strategy, and worked throughout the past year to encourage investors that the automaker can take on Tesla by building on the success of the automaker’s newest electric vehicle, the Chevrolet Bolt EV, and cutting expenses along the way.
A crucial element of the plan, according to two people knowledgeable about the company’s technique, is slashing the quantity of cobalt in GM’s brand-new EMC 1.0 battery system. The cost of cobalt– the single most expensive ingredient in present lithium-ion battery cells – has skyrocketed in the last 2 years in expectation of a rise in demand from automakers. Cobalt costs hit a record high this month on the London Metal Exchange.
GM’s brand-new battery design increases the quantity of nickel, which allows batteries to save and produce more energy.
