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In May, GM participated in its annual townhall meeting hosted by OESA. The message was clear from Jeff Morrison, GM Vice President of Global Supply Chain and Purchasing, and across all of the presentations, marketing promotions, and discussions that took place throughout the conference: “EVs for Everyone, Everywhere.” While GM is going all-in with their EV strategy, and this is nothing new, what was interesting and noteworthy was some of the early successes, roadblocks, and new market competitors that GM is now coming up against. These new vehicles making new names for themselves are also making some new waves in traditional marketplaces where GM is not a long-standing partner.
Early Successes with EVs
GM is on the record announcing during their first quarter 2023 earnings release that they are in the number two market position for EVs. With increased investment of $3 billion in a joint venture with Samsung's SDI battery cell program, and an investment of more than $1B in battery material maker POSCO Future M to expand the production capacity at their chemical battery materials facility in Canada, GM is securing the critical infrastructure needed to manufacture one million EVs by 2025.
Drive to Prime
But a bright future filled with EVs will require strategic partnerships and prime suppliers. It will not be business as usual for GM suppliers as Bill Venner, Executive Chief Engineer, detailed GM’s Ultium battery strategy and critical future vehicle developments. With the Ultium battery program in full effect, customers can expect a 40% reduction from Bolt EV battery costs and an overall reduction of 25% fewer parts.
Less parts means tighter margins for vehicle suppliers and raw material cost forgiveness – additional payments covering increases in raw material and operating costs will now become a relic. In 2022, GM supported roughly $5.5 billion in cost increases submitted by suppliers. This year they don’t expect to see this level as demand is cooling and supply pressures are not as severe. If you are a supplier looking for cost forgiveness this year you better have a compelling business case that brings significant value to the forefront of any of these discussions.
Charge It Up
As GM looks to advance its vehicle platform, questions still remain on how consumers will be able to capture the much needed electricity for these vehicles. For this power, Hoss Hassani, Vice President of Charging & Energy offered a unique perspective. There has become a collision of sorts within the automotive and energy landscape that is bringing a new competitive force to the market.
General Motors has historically been an automotive company and while they will remain in this industry, they are forging a new presence in the energy industry. This new presence is causing a level uncertainty amongst the typical energy powerhouses including Generac and solar partners. However, GM is committed to making EVs a reality for all. Citing that 90% of all EV charging occurs at home, GM will be launching the Ultium Home in November of this year. The Ultium Home Energy Management System allows you to create your own home microgrid for ultimate energy self-reliance. Additionally, multiple partnership efforts with Flying J and a new EVGO program will make charging available whenever and wherever you need it most.
While we all wait and see how many EVs can be manufactured, sustained, and accepted by humanity, the message is clear from General Motors. EVs for everyone, everywhere, and GM is prepared to make this a reality in the very near future.
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