General Motors Co (NYSE:GM) CEO Mary Barra highlighted the legacy automaker's push for "affordability" in the electric vehicles segement in a post-earnings call on Tuesday.
Affordability Key: GM aims to topple current electric vehicle leader Tesla Inc (NASDAQ:TSLA) in the coming years. Barra told investors that affordability is key in the electric vehicle game and that GM’s plan to launch a $30,000 Electric Equinox is a development “worth noting.”
GM plans to launch the Equinox EV in 2023 and is also working on an another, more affordable electric vehicle.
“Affordable EVs are part of the market that startups aren't targeting, but they are key to driving mass adoption of EVs, which is a national and a global priority.”
In contrast, Tesla CEO Elon Musk last month said his company is currently not working on a $25,000 electric vehicle at the moment.
Rising Demand: Barra also said the company would name the site for a fourth U.S. electric vehicle battery plant in the first half of this year, invest in a third electric truck assembly plant and focus on affordable EV launches.
Barra, who tookover as GM CEO in 2014, said the company's one million units of EV capacity in North America by the end of 2025 will not be enough to meet the growing demand for electric vehicles that it expects starting mid-decade.
“That's why we will continue to convert ICE capacity to EVs and plan to invest in a third EV truck plant. We are formulating plans for the truck plant right now,” Barra said.
The Detroit, Michigan-based GM has previously announced three battery plants.
GM’s Lordstown, Ohio battery cell manufacturing plant is expected to open by June this year followed by a Spring Hill, Tennessee plant by mid-2023. The company's Lansing, Michigan battery plant is expected to come online by late 2024.“Importantly, battery cells will not be a constraint to our long-term EV growth. Our Ultium Cells JVs in Ohio and Tennessee come online in 2022 and 2023, respectively,” Barra said, adding that GM will add capacity as demand grows.
Why It Matters: GM reported an adjusted EPS of $1.35 for the fourth quarter, which came ahead of the $1.19 EPS estimated by Wall Street. Revenue stood at $33.58 billion, beating analyst estimates of $34.01 billion.
The company said it plans to spend $9 billion to $10 billion this year including investments in Ultium battery cell joint ventures and said it expects similar levels of spending over the next several years.
Barra told investors GM is steamrolling ahead with plans to switch to an all-electric portfolio and is “not reinstating the dividend” as it invests for growth.
The company has previously announced it will spend $35 billion through 2025 towards scaling up electric and autonomous vehicles capabilities and launch 30 EVs by that time.
By 2030, it aims to have more than half of its factories in China and North America to be capable of EV production.
See Also: Elon Musk Says Tesla Is Not Currently Working On The $25,000 Compact Car — Here's Why
GM last month announced plans to invest about $7 billion for electric vehicle and battery production at four Michigan plants that would create 4,000 new jobs.
Price Action: GM shares closed 2.5% higher at $54 a share. The stock is down 11.6% so far this year.
Photo: Courtesy of GM
