When it comes to Electric Vehicles (EVs), Tesla is the “face” of this market in the U.S. In fact, there are some people who think Tesla is the only producer of EVs globally. However, this is far from the truth as there are a good number of EVs from more established car brands. According to InsideEVs, General Motors will focus on producing cheap electric vehicles. This will serve as one of the company’s strategic moves to surpass Tesla .
General Motors CEO, Mary Barra said in an interview with Yahoo Finance a few days ago that GM wants to replace Tesla as the world’s largest electric car maker by making cheaper electric cars. Of course, it is obviously trying to take advantage of the low-end EV market that Tesla is currently ignoring.
“GM is going all out, and in five years we’ll be selling more electric cars in the U.S. than any other car company, including Tesla,” said Mary Barra.
Mary Barra claims in an interview that in addition to launching high-end models, GM will also launch electric vehicles below $30,000. The company hopes to further gain a larger market share through a high-end + cheap strategy. As a leader in the era of fuel vehicles, General Motors has also made a lot of efforts in electrification transformation. The company acknowledges that there is still a long way to go and it will continue to maintain its leading position.
Top three startegies that GM hopes to use to surpass Tesla
1. Will launch new cars below $30,000 – set to cooperate with Honda to reduce costs
Earlier last month, General Motors and Honda announced that the two sides will cooperate to develop a series of low-cost electric vehicles based on a new joint platform. This cooperation will make full use of the advantages of the two companies in technology, design and supply chain.
The EVs jointly produced by GM and Honda will include popular segments such as the compact electric crossover. The industry expects these electric vehicles to officially hit the maket in 2027. In addition, in order to reduce costs and ease the burden on consumers, the two automakers will cooperate on electric vehicle battery technology in the future. This will help to further reduce electrification costs. It will also improve electric vehicle performance and promote vehicle sustainability.
In addition, the two companies will work on standardizing equipment and processes to achieve high-quality, low-cost vehicles through mass production. Looking at GM’s upcoming models, there are relatively cheap. The 2024 Chevrolet EV and another EV will start at less than $30,000.
At present, General Motors cheapest electric car is the Chevrolet Bolt electric car, which starts at $31,500. For its rival Tesla, its cheapest EV is the Model 3 which sells for $46,990 and the price of this car is also rising.
Among the electric vehicles that General Motors has recently launched or will launch this year, the Chevrolet Silverado electric pickup is the cheapest, priced at $39,900. Higher-end models such as the Cadillac Lyriq and GMC Hummer electric vehicles are in the luxury market. These EVs comes with starting prices at $58,800 and $79,900 respectively.
2. Huge investments GM to invest $7 billion US dollars in electrification
In January this year, General Motors issued an investment announcement with a total amount of $7 billion. GM claims that by 2024, it will invest more than $7 billion in four Michigan manufacturing bases to increase production of electric pickups. According to the investment announcement, GM will invest $2.6 billion through the LG New Energy joint venture in Michigan to build a new battery factory.
There are also reports that the new battery plant covers an area of about 260,000 square meters and will be put into operation by the end of 2024. This is also GM’s third battery plant in the United States. The other two – a battery plant in Lordstown, Ohio and another in Tennessee will go offline later this year and in 2023 respectively. There are speculations that General Motors will likely to set up a new battery factory.
3. Joint operation: GM to cooperate with raw material companies
In order to accelerate the transformation of the electric vehicle business, GM has actually cooperated with a number of raw material companies. In December, GM formed a joint venture partnership with German company, Vacuumschmelze (VAC) to build a plant in the United States. This plant will make permanent magnets for electric motors for GM’s future electric vehicles.
GM also has a joint venture partnership with South Korean battery materials company POSCO Chemical. Both companies will build a plant in North America to process battery materials for GM’s Ultium electric vehicle platform. We undertsand that the joint venture will produce “Cathode Active Material” (CAM), a key battery material. According to GM, CAM accounts for about 40 percent of its battery costs.
In October 2021, General Motors announced a strategic supplier agreement with North Carolina-based semiconductor company, Wolfspeed. They will jointly develop and supply silicon carbide (SiC) power solutions for GM’s future electric vehicles.
Conclusion: GM is struggling to transition to electrification
In 2021, Tesla’s share of the global electric vehicle market is close to 14%, compared with 7.6% for General Motors. According to media reports, in January this year, Tesla sold 37,162 vehicles in the United States (up 49% year-on-year). This accounts for nearly three-quarters of the US electric vehicle market. At the beginning of 2022, although the sales of pure electric vehicles in the United States have increased significantly compared with the same period, most of the market share is still occupied by Tesla.
GM has accelerated its electrification transformation by investing and cooperating in the field of electric vehicles. The company also has an established goal of “surpassing Tesla”. It can be seen that this traditional car company is anxious in the transition to electrification.
However, from the current point of view, the difficulties in front of GM are still arduous. Of course, as General Motors rises, Tesla will not stagnate. Tesla CEO, Elon Musk had previously stated that he would launch a $25,000 EV. Although he is currently back-tracking, GM’s low-price strategy will have competition from Tesla. Should GM launch a low-end model and its making waves, Tesla will do same. Whether it can surpass Tesla or not, it can narrow the gap and have a place in the eletrification wave.