General Motors is investing tens of billions of dollars in the production of a series of new electric vehicles, hoping to catch up with Tesla.
However, it seems that the automaker is far from achieving these ambitious goals. This year, it is struggling to produce a new type of battery pack for electric cars that it plans to bring to market in the next few years.
“It’s been a little challenging,” the company’s chief financial officer, Paul Jacobson, said on a conference call with reporters Monday afternoon.
In the first half of this year, GM produced just 50,000 electric vehicles, and most of them used the supplier’s older battery. In the United States, GM sold fewer than 2,800 cars that used its new Ultium modular batteries, made at a plant in Ohio that the company co-owns with LG Energy Solutions. Two more Ultium plants are under construction, in Tennessee and Michigan.
GM once said it planned to produce 400,000 electric vehicles in North America from 2022 to 2024 and more than one million in 2025, the vast majority of which would use Ultium technology.
Mr. Jacobson said the company expects to produce 100,000 battery-powered vehicles in the second half of 2023 and would provide more information on production plans on a conference call with financial analysts on Tuesday.
At this point, the slow rollout isn’t hurting the company’s bottom line. GM said Tuesday it posted a profit of $2.6 billion from April to June, up 52 percent from a year earlier. Revenues reached $44.7 billion, an increase of 25 percent.
Mr. Jacobson said the company benefited from higher prices and strong sales of trucks and sport utility vehicles in North America. The average price of the vehicles GM sold in the second quarter was $52,000 — up $1,600 from the first quarter of the year.
GM sold 833,000 cars and trucks in North America in the second quarter, up 26 percent from a year earlier. In the rest of the world, it sold 147,000 vehicles, which is roughly 8,000 less than a year earlier.
While the high profits are welcome, many investors are increasingly wary of the company’s EV strategy, as the vehicles are the fastest-growing segment of the auto industry.
A big investor fear is that GM, Ford Motor and other big automakers could quickly lose customers as more drivers buy battery-powered cars. In China, Europe and California, where electric vehicles already account for a significant and growing share of new car sales, once-dominant automakers like Volkswagen and Toyota are losing market share to Tesla and Chinese automakers like BYD.
Two years ago, GM CEO Mary T. Barra said the company aimed to double annual revenue to about $280 billion by 2030. Much of the increased business is expected to come from electric vehicles and new revenue streams from the software and services associated with these cars and trucks. The company has also set itself the goal of phasing out internal combustion models by 2035.
Right now, GM is “way behind where they should be,” said Sam Fiorani, vice president of global vehicle forecasting at consulting firm AutoForecast Solutions. “If they have problems with the first wave of these new EVs and if they can’t get them to market, it doesn’t bode well for the next wave of higher volume models.”
GM currently offers only a few specialty vehicles that use Ultium batteries. These include the Cadillac Lyriq, an SUV; The GMC Hummer, which starts at about $90,000; and large deliveries made by the new BrightDrop division.
This summer and fall, GM is slated to add three electric Chevrolets — the Blazer and Equinox SUVs and the Silverado electric pickup truck. The company previously said the Silverado would go on sale in the spring, but now it’s not expected until the fall.