General Motors Plans to Further Boost its Multi-Billion Dollar Investment in EVs, Sources Say
With electric automaker Tesla now crowned the world's most valuable car company, the rest of the auto industry is relegated to playing catch up and many automakers around the world are now rushing to develop new fully-electric cars.
U.S. automakers General Motors (GM) and Ford Motor Co. for example have committed billions of dollars to develop new electric vehicles in a bid to gain some ground on segment leader Tesla, with GM committed to investing over $20 billion on electrification. Now GM plans to increase that amount even more, according to Reuters.
The new initiatives are a company-wide effort to transform GM into a zero-emissions car company.
Mary Barra, CEO of Detroit-based automaker GM, plans to announce the company's revised and accelerated EV strategy on Thursday, which is reported to include billions in new investments. The move is also to convince investors it can be a serious competitor to Tesla in the future, people familiar with the plans told Reuters.
Barra, who is scheduled to speak at the conference hosted by Barclays, is expected to say the automaker is ready to spend more on electric models by 2025, on top of the $20 billion pledge announced earlier this year, the sources told Reuters.
Supplier sources said previous plans to make the GM's luxury brand Cadillac all-electric by 2030 are being sped up, possibly by 2025. According to Reuters, other sources said that acceleration will be repeated in other brands and in segments such as commercial vans.
"The pull-ahead in programs is real and the organization is really doubling down on speeding up product development," the source said.
GM has not officially confirmed its planned announcement for Thursday. A GM spokeswoman contacted by Reuters called reports "speculative" and declined to give further details.
However, the Detroit automaker is expected to discuss a revised timeline for many of GM's upcoming electric vehicles, such as the Hummer EV and Cadillac Lyriq SUV.
The first Hummer EV model is expected to go on sale in fall 2021, while the Lyriq is not expected to go on sale until late 2022. GM was criticized for not planning to bring the Lyriq to market sooner, which is poised to be GM's only competitor to the Tesla Model Y.
Although the Hummer EV arrives a bit sooner in the fall of 2021, its priced at $112,595, which guarantees its will never be a mass-market electric truck and more of a niche product for GM.
The Cadillac Lyriq will be built on GM's new modular electric vehicle architecture, which will be powered by the automaker's new Ultium batteries. The automaker's new EV architecture, which was announced in March, will underpin many future electric models. GM's Utium batteries will offer driving ranges of roughly 400 miles.
GM and South Korean battery maker LG Chem are investing $2.3 billion in a factory in Ohio to produce the Utium battery cells for its future EVs.
Earlier this month GM would boost capital spending over the next three years to speed EV development and was talking with other automakers about partnerships to develop more vehicles using GM's battery technology.
GM has said it plans to raise annual capital spending through at least 2023 to above the $7 billion rate previously outlined to fund its new timetable for EVs.
With Tesla nearly $400 billion market capitalization and growing pressure from regulators around the world to phase out internal combustion engine vehicles, both U.S. automakers GM and Ford are under pressure to electrify their model lineups and secure their futures in a changing auto industry.
Dozens of new battery-powered cars are scheduled to hit the market in the next few years from automakers around the world, including China which is the world's biggest auto market. South Korean automaker Hyundai for example, just announced its will introduce 10 new electrified models by 2022, putting even more pressure on GM to accelerate its EV development timelines.
GM's updated EV plans are also reflected in its latest effort to hire more engineers.
On Nov 9, GM announced its hiring 3,000 new employees through the first quarter of 2021 for high-tech roles in fields such as software engineering, IT and design. The move will contribute to GM's electrification strategy to help transform product development and other connected vehicle technology, the company said.
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