TSLA Tesla Inc

By Mike Colias 

General Motors Co. is renewing its push to convince Wall Street that it is the auto maker to bet on for electric cars, after a decadeslong effort to sell this technology to customers has gained little traction.

In a presentation Wednesday at the auto maker's engineering center near Detroit, GM executives detailed their electric-vehicle strategy in the coming years, including plans for new battery-technology that will allow its vehicles to travel up to 400 miles on a single charge -- topping today's competitors.

The company said it will spend $20 billion to develop electric and autonomous vehicles, quantifying for the first time its bet on these burgeoning technologies.

GM was the first major car company to put an all-electric car on the market in the 1990s and more recently has attempted to bring this technology to the mass market. The company debuted a plug-in hybrid Chevy Volt about a decade ago and later added the all-electric Chevy Bolt -- neither of which sold well.

Investors so far been putting their money on Tesla Inc. as the company best positioned to capitalize on a big swing toward electric vehicles. Tesla's valuation has soared to more than $130 billion, roughly three times as large as that of GM.

"I think General Motors is undervalued. I really do," said Chief Executive Mary Barra. "We're bringing the power and might of General Motors" to grow electric-vehicle sales.

GM also unveiled plans for about a dozen new electric-vehicle models across its brands, including a new, bigger version of the Chevrolet Bolt electric SUV, a new Chevy midsize SUV and several Cadillac models, including one called the Lyric. It also plans two new Hummer models, a pickup truck and an SUV to be sold under the GMC Brand.

Executives were expected to preview those new models Wednesday to analysts, dealers and journalists.

"This is the biggest opportunity any of us has ever seen for this company," GM President Mark Reuss said.

The Detroit auto-manufacturing giant is placing among the industry's largest bets on electric vehicles in an effort to reduce its more-than-century-old reliance on the gasoline engine and challenge Tesla Inc.'s dominance in battery-powered cars.

Global auto makers are plowing investment into future electric cars, prodded in part by tougher tailpipe-emissions regulations in major markets, such as China and Europe. The rise in popularity of Tesla also has added a sense of urgency for traditional auto makers in recent years and showed a viable market for battery-powered cars, car executives have said.

Auto makers have committed a combined $225 billion toward electric-vehicle development over a five-year period ending in 2023, consultancy AlixParnters estimates. The largest number of models are slated for China and Europe.

The rush to invest in this technology comes as questions remain about consumer demand, profitability and the availability of public charging stations.

GM executives reiterated that the future generation of electric cars will be profitable, unlike GM's lone electric entry in the U.S. today, the Chevy Bolt, which loses several thousand dollars per sale, current and former employees have said.

On Wednesday, GM provided a more in-depth look at its battery strategy, highlighting a new proprietary technology it has developed with partner LG Chem, called Ultium, that uses lower amounts of cobalt than the lithium-ion batteries used in electric vehicles today. Cobalt is an expensive chemical that is difficult to source. Tesla Chief Executive Elon Musk has said the company's next generation of batteries will eliminate cobalt altogether.

GM said it will be able to configure its "pouch-style" battery cells in more flexible layouts, which will allow it to deploy a variety of body styles and sizes. It said some vehicles will have the capability of traveling up to 400 miles on a single charge, well beyond the roughly 260-mile range of the Chevrolet Bolt.

GM also said it may license its battery-cell technology to other companies. The company in December said it will jointly invest with LG in a $2.3 billion battery-cell manufacturing plant in northeast Ohio.

In October, Ms. Barra said GM likely would invest more capital in electric vehicles than gasoline-powered ones over the next five years, even though today they account for less than 1% of GM's overall sales. The company expects about $7 billion in capital expenditures this year.

Over the last two decades, GM has been seen as a leader on electric cars among traditional auto makers, though the technology never emerged as a significant part of its business.

In the late 1990s, GM put out the EV1, an all-electric vehicle that was seen as groundbreaking. But the car sold poorly and was phased out after a few years, upsetting environmentalists and eventually spawning the 2006 documentary, "Who Killed The Electric Car?"

In 2010, GM introduced the Chevrolet Volt plug-in hybrid, which ran on electric power for about 40 miles before a gas-powered generator took over to charge the battery. The Volt developed a fervent fan base, but sales fell short of GM's goals. The Volt was discontinued last year.

GM's Chevy Bolt EV was billed as the first relatively affordable electric car when it was released in 2016, with a range topping 200 miles on a single charge. Sales have been tepid, though. Last year, the car was outsold by Tesla's comparably priced Model 3 more than 10-to-1 in the U.S., according to trade publication Automotive News, which collects car-industry data.

Now, GM and rival Ford Motor Co. are centering their electric-vehicle plans for North America largely on pickup trucks and sport-utility vehicles, which typically carry bigger profit margins and are sold to customers more apt to pay up for extra features and technology.

Ford is rolling out its first electric vehicle planned for significant sales volume, the Mustang Mach-E SUV, and has said it is working on a battery powered version of its popular F-150 pickup truck. It also has partnered with Michigan-based startup Rivian Automotive to put out an electric vehicle under its luxury Lincoln brand.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

March 04, 2020 13:11 ET (18:11 GMT)

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