GM deepens EV bet with 35% budget boost, 30 new models

Bloomberg

General Motors (GM) is laying the groundwork for a bigger bet on electric vehicles, telling investors at a virtual conference it plans to boost spending on them by more than a third to $27 billion as part of a push to introduce 30 battery-powered models by 2025.
The initiative represents an increased investment of $7 billion and 10 more EVs than previously planned, including some that will be cheaper than $35,000.
The announcement comes as rival automakers plan dozens of new all-electric models, which could benefit from EV-friendly policy changes expected under the administration of President-elect Joe Biden.
It’s a big move from Chief Executive Officer Mary Barra, who has made the electrification of GM’s lineup and a push for technology the keystone of her six years atop the largest US automaker. She is making a calculated gamble that car buyers are ready to make the switch to plug-in models.
“We have everything in place to accelerate mass adoption of EVs,” Barra said at a Barclays auto conference. “We want to be No. 1 in EVs.”
GM’s biggest lever to achieving her goal is dropping the cost to produce electric vehicles, which lose money for GM and don’t consistently turn a profit for Tesla Inc.
The Detroit automaker aims to cut the manufacturing cost of its Ultium battery pack by 60%, enabling EVs to achieve near price parity with gasoline-powered cars by around mid-decade, Doug Parks, GM’s executive vice president of global product development, said at the conference.
Parks said GM’s current battery pack is close in cost to $100 per kilowatt-hour, the amount carmakers generally need to make a profit.; the second generation Ultium battery will be 20% cheaper.
“They have made a lot of progress in driving the cost down,” said Sam Abuelsamid, an analyst with Guidehouse Insights, a research firm.
“They are getting a higher degree of confidence with their claims about the technology, and think they can sell more of them.”
GM, which has struggled with sales of its all-electric Chevrolet Bolt, says its next generation of EVs will appeal to a wider variety of buyers now that Tesla has primed the market for sexier and sportier battery-powered vehicles.
“Tesla has a good jump,” Parks said in a conference call with reporters. “They’re a formidable competitor and there are a lot of startups. We don’t want to cede leadership.”
GM must also keep pace with traditional competitors. Volkswagen AG said that it plans to spend around $86 billion on new technology, with most of it going to electric vehicles.