DETROIT Reuters chief executive Mary Barra is betting that moving more slowly than Tesla or Ford to accelerate electric vehicle production for North America will be more profitable in the long run.
Suppliers familiar with GM's production plans through 2025 support the idea that the automaker continues to slow-walk electric vehicle investment and output while it continues to bank money from its big combustion-engine pickups and SUVs.
GM plans to build just 170,000 EVs in the US and Mexico in 2023, and 285,000 in 2024, according to data collected by AutoForecast Solutions, which expects the automaker's EV production to remain under 500,000 in 2025 - about half of its actual capacity of 1 million.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said GM knows it needs to look like a tech company to Wall Street and prop up its stock price by talking about its EV future, but its bread and butter remains large pickups and SUVs with V 8 engines, which continue to generate most of the company's profits.
GM is going to launch four new EVs this year - one pickup and three SUVs - and four more in 2024, but most of them will be built in relatively low volumes through 2025, according to AFS.
From 2022 through the first half of 2024, GM has planned to produce 400,000 electric vehicles for North America. Most of the 400,000 vehicles are going to be built later this year, according to Paul Jacobson, Chief Financial Officer at Barra and GM Chief Financial Officer.
GM said it has secured all the battery materials it will need to build 1 million EVs a year in North America by the year 2025. The Nevada battery plant has 2 million vehicles of annual production, and Tesla is investing $3.6 billion to expand its Nevada plant.
GM is building three U.S. battery plants with LG Energy Solution, and Barra said the automaker will need more. She didn't say when GM would move forward with plans for a fourth U.S. battery factory.
Ford announced on Monday that it would reduce prices for its Mustang Mach-E electric SUV by 8%, and reaffirmed its goal of selling 600,000 EVs annually by the end of 2023. Ford had previously set a goal to increase North American production for the Mach-E to 130,000 vehicles this year.
Ford plans to expand production capacity for its F 150 Lightning electric pickup to 150,000 vehicles a year by the end of the year.
In the short run, GM's go-slow approach could allow it to sidestep the price war that Tesla launched earlier this month. The investors seemed to be on board Tuesday with GM's approach and bullish financial forecasts, sending shares up more than 7%.
Barra said orders for GM's new EVs are strong, such as the GMC Hummer pickup and SUV, the Cadillac Lyriq and the electric Chevrolet Silverado pickup.
Barra told analysts during a call that the pricing we put out was very appropriate based on the interest in those models.
Barra and Jacobson said that GM will work to avoid discounting by holding inventories of all vehicles - combustion powered and electric - much tighter this year than in the pre-pandemic past. GM wants to end this year with 50 to 60 days worth of vehicles at U.S. dealers, 20 to 30 days less than normal in 2019, Jacobson said.
The production of GM's newest EVs is slowly increasing. Last year GM delivered just 122 Cadillac Lyriq SUVs and 854 Hummer pickups.
The production of the electric Hummer SUV began this week, according to Duncan Aldred, GMC brand chief. He said that the division has 90,000 reservations for the high-performance Hummer EVs and is sold out into the next year.