Weekly Brief: GM Bets Big on EV Revolution

General Motors will invest $27Bn in electric vehicles by 2025, CEO Mary Barra announced last week.

The carmaker will use that investment to rapidly expand its EV offerings in the coming years. Barra said that her company will introduce EVs at every price point, from high-volume entries below $35,000 to luxury vehicles like the $80,000, 1,000-horsepower GMC Hummer EV due out in 2022.

GM plans to bring 30 new EVs to market in total by 2025 and will hire 3,000 employees with expertise in software and coding by early 2021 to make this possible. With its investment, GM has cruised past a critical inflection point. It now will invest more in EVs than in gasoline and diesel vehicles. That’s a first in the carmaker’s history. The only other major American carmaker that can claim that is Tesla.

Speaking of Tesla, GM clearly has its sights set on dethroning its rival by 2025 as the largest EV manufacturer in America. In 2019 Tesla sold 381,190 EVs, nearly twice as many as GM’s 211,587. It would be an impressive feat to make up that much ground in five years but Barra says her company is eager to become the leader in EV market share by 2025.

GM’s billions of investment is not without risk. When you look at the car market as a whole, EV market share grew by only 0.2% between March 2018 and March 2019, from a measly 1.6% of all vehicle sales in 2018 to an only slightly less measly 1.8% in 2019. GM sold nearly 2,887,046 vehicles in total in 2019, only 7% of total sales, yet it’s now investing more in those EVs than in gas or diesel.

Ever since 2016 GM has been determined to refashion itself as a mobility company of the future. That’s included its push toward EVs and into self-driving cars with the acquisition of Cruise. If the automotive future is autonomous and electric, GM wants to ride on the leading edge of that revolution, or better yet drive the change itself.

Last week the National Highway Transportation Safety Administration (NHTSA) announced that it’s ready to start the process of introducing federal self-driving car regulations. This is something that safety advocates and autonomous vehicle companies like Waymo and Cruise have advocated for years because it will help establish a framework for how AVs should operate in society and what standards they should be held to, which in turn could help foster greater public trust.

To be clear, NHTSA isn’t ready to unveil new regulations yet. Instead, as a first step, it’s asking the public to comment on framework principles. That’s like asking lawmakers to pontificate on health care or immigration. You’ll get lots of answers but that doesn’t mean you’re anywhere close to legislation. Still, it’s nice to hear NHTSA acknowledge that it’s time to stop applying old Federal Motor Vehicle Safety Standards to a whole new paradigm. Instead, a new governmental safety framework tailored to AVs and autonomous driving systems is required. Once we have one, it could expedite the AV revolution, which in turn could power the EV revolution, since most AVs are EVs as well. That is music to GM’s ears.


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