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)
Copyright (c) 2020 Dow Jones & Company, Inc.
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