General Motors doesn’t expect significant US Production of EVs until not for a while and they’ve come up with a reason for this. Their reasoning? Well, it makes sense, but at the same time, it is a little bit concerning.
CNBC says that GM is slowly increasing production while others such as Hyundai, Tesla, and Ford have been ratcheting up the production of Evs. They think GM are falling behind. When General Motors launched the GMC Hummer EV in 2021, the automaker said it was a new benchmark for its vehicle development time. Now, production and sales pace of the truck has been anything but that. For starters, it’s technically true. They did launch it in 2021, but they only launched one. They made one. Seriously? Maybe that’s why they called it the edition one.
The Detroit automaker sold only 854 of these vehicles in 2022. That’s an average of 17 vehicles per week. Now, it’s not because of demand. They have tens of thousands of preorders. People want it. They just aren’t making many of them. Now, this includes some downtime at the production plant, so it hasn’t all been production processes as normal. However, it’s a long way and a far cry from the traditional production ramp-up over several months, albeit in a new vehicle. I mean, it’s going very slowly. Fairly or unfairly? The media have said very little. Strange. But it’s not just the Detroit-produced Hummer. It’s all of GM’s new EVs in the US as the company slowly ramps up production of vehicles on its new Ultium EV platform. They may be considering using cylindrical cells now. Anyway, that’s just a rumor. That may not be true.
GM executive said Tuesday they don’t expect significant production increases of the new EVs until the second half of this year, making the Hummer a nearly two-year ramp up and causing production of the Cadillac Lyric to be painfully slow at a plant in Tennessee. Now, I’ve been onto some of the General Motors forums. There’s a lot of people there who have ordered the Cadillac Lyric. Some of them are saying they’ve canceled their orders to buy a Tesla Model Y because they’re sick of waiting. They’ve now waited for more than a year. And GM has not given them any time frame. They’re basically emailing and calling GM, when are we going to get our Car? When are we going to get a car? Just give us a date, just give us an idea and GM is saying nothing, as in nothing at all. Now, the problem word is from GM cell production, battery production. Cell production at GM’s new or under-construction US plants, according to Executives, is going slower than they had hoped. “We’ll be ramping up EV volumes throughout the year”, GM Finance Chief Paul Jacobson told reporters on Tuesday Morning after Releasing fourth-quarter Results. We’ll obviously beat a significantly higher run rate at the back half of this year, other than what we’re starting and it’s really all indexed to sell capacity. Now, I actually think General Motors could have avoided this situation, and I’ve said this for a long time now, in fact, I’ve said this for more than a year, that GM is just relying on one battery partner. I mean, It’s not really true that GM is making these batteries. The truth is that it’s a joint venture partnership with LG Chem, which is A Korean company, basically One of the biggest petrochemical companies in the world. In fact, they don’t like to be known as LG Chem. They changed their name to LG Solutions because LG Chem doesn’t sound good. But anyway, that’s beside the point. The point is here that’s their Only Banner of Supplier, they’ve had a falling out recently, they’ve canceled their fourth factory between the two companies. It appears as though GM is just stuck now, having to wait for this limited production. Now, they could have actually done what other companies, such as Tesla have done, and make battery supply contracts with numerous companies in Order To not have all of their eggs in one basket, which they do. They have all of them in one basket. They’re simply relying on one company and now they’ve had a falling out. I don’t know if LG Chem is going to be prioritizing them in The Way that they would have in the past. Plus, the thing Is, this production of Batteries, it’s pretty slow. I mean, it could take General Motors several years before we see significant numbers of EVs. Not it could. It probably will. In October, GM CEO Mary Barra pushed Back plans for GM to Collectively produce 400,000 EVs in North America by 6 months due to the inability to ramp up battery production as quickly as the company expected. But the thing is, this is one of several pushbacks. I mean, this isn’t the first time we’ve heard of a pushback. In Fact, it’s the fourth time we’ve all just got Short Memories or we haven’t been paying attention because it’s actually been happening since 2017. Doug Betts, an industry veteran and JD Power President of Automotive, said a normal ramp-up from the start of production to hitting targeted units is about 30 to 60 days. However, that can vary by product depending on the amount of new parts and procedures for employees. Now, barring any supply chain problems, Betts said electric vehicles should be easier and faster to build than traditional vehicles with internal combustion engines for an experienced automaker. But it’s not actually true. That’s what everyone thought. It really hasn’t played out that way at all, in fact, not for any legacy. automaker. Barrier said on Tuesday that the ramp up remains on track for the Ohio facility. In addition to construction completion of similar battery facilities in Tennessee later this year and Michigan in 2024, she said the Ohio plant should be at full production capacity around the end of this year, adding about 20% per quarter. “This is the breakout year for the ultium platform”, Barra told investors Tuesday, adding “the Tennessee plant should be able to scale more quickly. These plants will help us meet pent up demand, and it keeps our other EV launches on track.
Now, to be fair, this is an extreme misnomer. I mean, to meet pent-up demand, really? What, you’re going to make 400,000 Evs in the space of six months? That’s what would be meeting pent-up demand. I mean, the truth is that they’ve got hundreds and hundreds of thousands of reservations. They’re not going to get through these reservations for several years. Mary is really presenting a rosy picture here, but it’s not going to be that simple. It really isn’t. I wish it was. I personally love the Silverado electric pickup truck. I’d love to see them out off the roads. I’d love to see them here in Australia replacing all these just terrible diesel-producing pickup trucks that are on the roads that are just like you sit behind them in traffic and you can’t have your windows open. You just can’t. Otherwise, you know what you’re sucking into? You know what you’re sucking into your lungs. It’s really not good. I mean, imagine if all those were EVs. That would be unreal. So I really want Jim to succeed here, but like I said, because they’re alone on one battery partner, they’re just stuck with this. They’re stuck with a slow ramp-up. Now, GM said Monday it launched production of the GMC Hummer SUV EV at a plant in Detroit, and that vehicle is expected to be followed by an electric silver Chevrolet Silverado work truck by midyear, and electric versions of the Chevrolet Blazer and Equinox by the second half of 2023. Of course these vehicles will come out, but I don’t think Jim will be making many of them this year. GM says while it argues it’s planning for the mid to long term and is well positioned with its Ultium EVs, including securing all the raw materials needed for a North American production capacity of 1 million units by 2025.
The company said Tuesday that it plans to invest 650,000,000 in Lithium Americas in a bid to gain more access to lithium, a key component in EV batteries. So what they’re basically doing is they’re becoming a mining company. That’s a good move, in my opinion. They’re basically investing in a joint venture to extract lithium from a mine. “This has been carefully cadenced”, said Stephanie Brinley, principal automotive analyst at SNP Global Mobility, also signaling supply chain problems across the automotive industry. In the long run, they’re going to be better off being careful about it. They’re still in a good position to lead over time. Now, speaking of General Motors leading, this is the same company that got into bed with Nicola. When everyone on YouTube was making videos saying, what is GM doing? Nicola is a scam. They were at the time, Trevor Milton was faking everything. This was the same company that just ignored all of that and was like, no, we want to capitalize on this. This is going to be great. We’re going to invest in Nicola, it’s going to be a joint venture partnership. They’re the only ones that didn’t realize what was really going on. So I do have to question how well they actually have planned out for their future. The reason that I say that is because of logic. I mean, aside from that investment, let’s think about this on a real logical basis here. What else has GM done recently? Well, we’ve learned that they have invested nearly a billion dollars in V8 engine development over the past. Well, they’ve just spent that basically within the last few weeks. Why? What is that going to do for these V8 engines? Improve efficiency by 1%. I mean, it can’t do any more than maybe 2% improvements. I just don’t see V8 buyers caring about that. I don’t hear any of them saying, please, we wanted more, slightly more efficient V8 engine. I just don’t see what the point of that is. In addition to that, we’ve also learned that GM has been secretly working on a hydrogen-powered fuel cell vehicle with Honda. In fact, they’ve been working on that for more than seven years. At no point during that seven-year period of time did GM say, well, actually, there’s no demand for these vehicles. What are we wasting our time and money doing this for? So whilst GM is dragging their feet a little bit. Doesn’t look like it, but they are. And at the same time, others such as Hyundai Motors and Ford, plus Tesla, have been ratcheting the up production of EVs industry leader Tesla targets to produce 2 million electric vehicles this year. Ford, which ranked second in EV sales in the US last year, expects to increase production of the electric F 150 Lightning pickup truck. And they’re working on a next-generation platform which will be cheaper, be able to use lithium-ion phosphate batteries very, very important, be able to use lithium-ion phosphate batteries. I want to say that 50 times in a row because it’s so important to their success. That’s been the biggest reason for Tesla’s success with LFP batteries. That said, they’ve made massive profits and massive numbers of cars. That is really what it comes down to. There are other factors. That is the biggest factor. Ford has gone. You know what, Jim Farley said, you know what? That was a good move. Let’s do the same. GM’s Detroit rival was also able to ramp up production of the electric pickup truck to sell more than 15,600 of these vehicles since the truck went on sale in May last year. And that number is not that big, but it’s a lot better than the Silverado numbers, which are precisely zero, or the Hummer numbers, which are, well, not many. Following recent price cuts by Tesla and Ford on its Mustang Mach-E, Jacobson said the company feels its EVs are well positioned regarding pricing, GM’s EVs currently range from the mid 20,000 Chevrolet Bolt models, which are very well priced in a question to the more expensive 100,000 US dollar Hummer vehicles. Now, that price right now is fine, because they can’t make many of them, so there’s way more demand than there is production capacity. That may change in the future, though, when there’s many other choices on the table for customers, for buyers. Dem expects to ramp production of the Bolt models, which use older battery technology, to 70,000 vehicles this year, 70,000 for an entire year. I mean, to be honest, that’s still peanuts, different batteries to assist in scaling its EVs, GM could potentially change the packaging of its batteries to cylindrical cells instead of pouches. But that would require a whole bunch of new machinery, new learnings. That would be a really big, steep learning curve. Now, Mary Barra has declined to comment on media reports about a change to cylindrical 4680 batteries or the addition of the cylindrical cells to its plants. And if she’s declined to comment, I’d say it’s more than likely that where there’s smoke, there’s fire. She said, “The company has been evaluating different battery form factors, and it designed the Ultium platform to be agnostic of current battery shapes. We can look at what is going to be the right battery for the specific vehicle from a performance perspective, so we have complete flexibility”, Barra said. In other words, it sounds like GM and Barra have recognized the fact that maybe ultium cells or pouch cells aren’t actually ideal for every model, which is what they’ve been claiming up until a week ago. Seriously, they have changed tact significantly. I believe I said that this would happen. I believe many of you said this would happen. I believe many insiders have said that this would happen, that actually, the cells they were using weren’t as modular as they claimed. Well, maybe they’re modular, but they weren’t as suitable for every vehicle, as GM has claimed. Barra said.GM currently uses cylindrical cells for its EVs in China, including the Lyric. And Dealers there delivered about 2400 vehicles from September through to December. That compares to 122 Lyric EVs with pouch cells in the US. Big number, right? 122 versus 2400. But the Cadillac Lyric in China was announced many months after the Cadillac Lyric in the United States. It’s unclear whether switching to cylindrical cells would increase Production in the US as China’s battery plant production is further along than in America. Well, way further along, obviously. A GM spokesman declined to comment on whether a fourth announced battery plant in the US would produce cylindrical cells if they declined To comment.
Well, it’s pretty clear that something is going on there. I Would say it Is likely they will be producing cylindrical cells. But the question is with who? Who will be their Battery partner? Could it be Panasonic? Possibly. Talks between GM and LG Energy Solutions stalled. They canceled their fourth factory between the two companies. I believe that’s the key reason right now. To be honest, general Motors seems to be floundering a little bit, kind of as it Invests Money in hydrogen in V8 engines and stalls on battery production. I’m not convinced that Analysts are right. Analysts have said now on numerous occasions that GM will pass Tesla in 2025 maybe at the latest, in 2026, and completely dominate them by 2028. It doesn’t appear, by the way, things are going, that is even remotely likely, but I could be wrong.
