General Motors Co (NYSE:GM) plans to launch a new family of electric vehicles in 2021 that will cost less to build and make a profit for the U.S. No. 1 automaker, Chief Executive Mary Barra told investors on Wednesday at a speech.
Her plans represent a direct challenge to money-losing electric vehicle specialist Tesla Inc (TSLA), which is struggling to get its more affordable, high-volume Model 3 launched and recently reported its largest-ever quarterly loss.
“We are committed to a future electric vehicle portfolio that will be profitable,” Barra said at the Barclays Global Automotive Conference in New York.
Electric and autonomous vehicles – known in the industry as EVs and AVs – are widely seen as the keystones of future transport, but Tesla, Ford Motor Co (F) and other manufacturers are still working out how to make money on them. GM is looking to break out of that pattern by developing an all-new electric vehicle platform that will accommodate multiple sizes and segments, to be sold by different GM brands in the United States and China, Barra said, adding new details to GM’s aggressive electrification strategy. In early October, GM said it planned to launch 20 new electric vehicles by 2023, but did not provide specifics.
In comparison, rival Ford has said it plans to introduce 13 “electrified” vehicles – mostly hybrid gasoline-electric models – by 2022.
Barra said GM aims to be selling 1 million electric vehicles a year by 2026, many of them in China, which has set strict production quotas on such vehicles. On Monday, GM’s China chief said the automaker and its joint-venture partners will be able to meet the country’s 2019 electric vehicle requirements without purchasing credits from other companies. GM’s cost reduction efforts on electric vehicles center on a new battery system that will be more than 30 percent cheaper than the one that powers the Chevrolet Bolt. The company aims to cut the cost of its lithium-ion batteries to less than $100 per kilowatt-hour from $145 per kilowatt-hour by 2021, which would bring the overall cost of electric vehicles much closer to comparable gasoline-engine models.
GM said the new batteries would hold more energy and charge quicker. The company is aiming to boost electric vehicle range to more than 300 miles (483 km) with the new batteries. The current Bolt is rated at 238 miles between charges. Barra said GM will have the ability to manufacture high volumes of the new batteries at plants in the United States and China. She said GM projects sales of 1 million electric vehicles a year by 2026. So far, the company has sold about 17,000 Bolts.
GM’s new electric vehicle platform in 2021 will serve as a base for at least nine derivatives, ranging from a compact crossover to a large seven-passenger luxury sports utility vehicle and a large commercial van. It will also provide the underpinning for a shared autonomous vehicle (AV) that GM plans to put into commercial service in 2021.
“We are not capital constrained in our EV or AV development,” she added.
GM is generating strong profit from selling trucks and sport utility vehicles in the United States, and Barra reaffirmed a promise to investors that GM’s core North American vehicle business should achieve 10 percent pre-tax profit margins.
GM’s shares were down 0.4 percent at $42.84 in midday trade. Tesla and Ford shares were also down slightly in a broadly lower market.
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