In Warren, Michigan, General Motors (GM) anticipated being on track to rival Tesla in electric vehicle (EV) sales by this time, stemming from a 2021 declaration by CEO Mary Barra. She asserted confidently that the automaker would catch up with Tesla by 2025. However, GM has faced numerous industry-wide and internal challenges, including slower-than-expected EV adoption and complications in production, software, and supply chains. As a result, the company remains behind Tesla, as well as Hyundai Motor/Kia and Ford Motor.
Despite withdrawing most of its previously announced EV targets, GM reports accumulating momentum in its EV sales, crediting a growing and diverse lineup of all-electric vehicles that range from affordable $35,000 models to high-end $300,000 options.
Rory Harvey, GM’s president of global markets, reported to CNBC that the company is experiencing significant growth in EV sales, highlighted by near-record sales data through August 2023. According to Harvey, GM almost matched its entire second-quarter EV sales in July and August alone, showing a year-over-year increase of about 70%.
Closing in on Ford in terms of sales volume, GM was only about 2,000 units behind through August 2023 but still far short of Hyundai/Kia’s figures. Tesla, estimated by Motor Intelligence to have sold over 164,000 EVs in the second quarter, remains the dominant player in the market.
GM is expected to maintain strong sales momentum through the end of the year, as outlined by Harvey. The company’s expanded EV lineup currently includes eight “Ultium-based” models, with two more Cadillac vehicles expected to join by the end of the year, bringing the total to 10. Analyst Stephanie Brinley from S&P Global acknowledges GM’s efforts, although the rollout did not proceed as quickly as planned.
In comparison, Tesla offers five vehicles between $39,000 and over $100,000, and Hyundai/Kia has nine models priced between $34,000 and $80,000. According to Brinley, given the variety of GM’s offerings and the billions invested in their development, there is significant pressure on the automaker to meet consumer demand and sell these vehicles.
Despite their lower profitability compared to gas-powered models, GM anticipates EVs to become profitable on a production margin basis upon reaching 200,000 units by the fourth quarter. EVs have also played a crucial role in helping GM meet federal fuel economy standards. Barra’s goal remains for GM to offer exclusively all-electric vehicles by 2035, aligning with consumer demand.
Harvey mentioned that GM is actively engaging customers through various events and ensuring dealerships are well-stocked with EVs to stimulate interest and sales. He emphasized the importance of customer interaction in driving sales, a sentiment shared from his experience both in the U.S. and U.K.
The ambitious 2035 target reflects a pivotal shift for GM, which was one of the first legacy automakers to pivot towards EVs. This transition included several announced targets that have since been revised or withdrawn. An anticipated North American production capacity of 1 million EVs by 2025 and EV profitability comparable to gas models have been among those adjusted.
GM now targets producing between 200,000 and 250,000 EVs this year. Harvey stressed that they will continue to adapt based on customer demand, refuting any overinvestment in EVs and emphasizing a commitment to balance production with market needs.
As per projections by Cox Automotive, EVs are expected to comprise about 10% of overall U.S. vehicle sales by the end of 2023, an increase from 7.3% during the first quarter, indicating a growing market presence as the industry progresses towards broader EV adoption.
