Mary Barra, Chairman and CEO of GM, speaks during the unveiling of the Cadillac Celestiq electric sedan in Los Angeles, Oct. 17, 2022.
Frederic J. Brown | AFP | Getty Images
WARREN, Mich. – If everything had gone according to plan, General Motors Over the past three years, the Detroit automaker is said to be well on its way to Tesla in the sale of electric vehicles.
In October 2021, GM CEO Mary Barra stated that the automaker would “absolutely” overtake the U.S. EV leader by 2025. Instead, after slower-than-expected EV adoption in the industry and GM-specific challenges with manufacturing, software and supply chains, the company remains far behind Elon Musk’s automaker, as well as Hyundai Motor/Kia and Ford engines.
While GM has withdrawn most of its previously announced electric vehicle goals, the automaker believes its electric vehicle sales momentum is finally increasing thanks to a growing lineup of all-electric vehicles — with a price range of around $35,000 to more than $300,000.
“We're absolutely outpacing the industry in terms of growth, in terms of EVs,” Rory Harvey, GM's president of global markets, including North America, told CNBC. “We have the most extensive EV lineup of any manufacturer in the industry, in the U.S., right now.”
EV sales data provided to CNBC by the Detroit automaker, which breaks down quarterly sales, showed a notable increase for GM through August. GM sold nearly 21,000 EVs in the U.S. in July and August, nearly equal to its entire second-quarter EV sales. GM’s EV sales through August were up about 70% from a year earlier.
“It's a big step forward in the performance of our electric vehicles,” Harvey said during an interview this month at GM Cadillac headquarters in suburban Detroit.
Those two consecutive record months for GM's EVs put it within reach — about 2,000 units — of Ford through August. It still remained more than 20,000 units shy of Hyundai/Kia EV sales through last month. Both Ford and Hyundai/Kia report monthly sales.
The traditional automakers are still battling for a distant second place behind Tesla, which Motor Intelligence estimates sold more than 164,000 electric cars in the second quarter — about double the sales of GM, Hyundai/Kia and Ford combined in that period.
Harvey declined to speculate on whether or when GM expects to surpass its competitors in electric vehicle sales, but the automaker is predicting a strong end to the year.
“We have momentum on our side,” Harvey said. “We expect the fourth quarter to be strong in terms of EV adoption. So we look forward to that close and look forward to capturing a disproportionate share of the upside.”
Growing EV offering
GM currently offers eight Ultium-based electric vehicles to consumers, citing its electric vehicle architecture and battery technologies.
They range from mainstream models like the Chevy Equinox and Blazer crossovers to three full-size pickup trucks and luxury models from Cadillac, including a custom-built $300,000 Celestiq. Two additional Cadillac vehicles – an electric Escalade and an entry-level Optiq crossover – are expected to join the lineup later this year, bringing the total to an industry-leading 10.
“They're doing what they said they were going to do. Their plan was to have Ultium and have it on a lot of cars relatively quickly,” said Stephanie Brinley, principal automotive analyst at S&P Global. “It didn't come online as quickly as they wanted. But that was the plan.”
2025 Cadillac Escalade IQ
Michael Wayland / CNBC
For comparison, Tesla’s five vehicles range from the roughly $39,000 Model 3 sedan to the more than $100,000 Cybertruck. Hyundai, including its luxury brand Genesis and its sibling Kia, has a lineup of nine cars and crossovers, ranging from about $34,000 for the Hyundai Kona electric to $80,000 for the Genesis G80.
With so many GM models, expectations to increase sales are high. The automaker has spent billions of dollars developing the vehicles, and now “the pressure is on to sell them,” Brinley said.
“The pressure is on to be able to manage and meet consumer demand,” she said. “But this is a matter of 10 to 15 years to get to a point where electric vehicles become more dominant than [internal combustion engines]and it may still take some time for consumers to get used to it.”
Cox Automotive expects electric vehicles to account for about 10% of total U.S. auto sales by the end of the year, up from 7.3% in the first quarter.
The Chevrolet All-Electric Blazer EV.
Scott Mlyn | CNBC
For GM, selling more electric cars is still somewhat of a contradiction: They're still far less profitable than other gas-powered models, but the automaker expects electric cars to be profitable on a production or contribution margin basis once production reaches 200,000 units in the fourth quarter.
EVs, which also help the company meet tougher federal fuel economy standards, are a key growth area under Barra. The CEO still hasn’t fully backed off a goal announced in January 2021 that the automaker would offer only fully electric vehicles to consumers by 2035.
Harvey told CNBC that the automaker is “doing a tremendous amount right now in terms of roadshow events, getting customers into our vehicles and making sure that our fleets at our dealerships have the right number of electric vehicles.”
“In the US you say, ‘Butts in the seat sells cars,’ in the UK we say, ‘Feel at the wheel, seals the deal,’” said Harvey, a UK native. “But it’s the same thing.”
EV goals
The 2035 target, which Barra said will be led by customer demand, was a transformative goal for GM. The Detroit automaker was the first traditional automaker to go “all in” on EVs and restructure its business to focus on the vehicles, including announcing several other targets that have since been withdrawn or modified.
Retracted 2025 targets include North American production capacity of 1 million EVs and EV profits comparable to gas models. The status of other targets, such as $50 billion in all-electric vehicle sales next year, is unclear.
GM is sticking to a near-term goal of producing between 200,000 and 250,000 electric vehicles this year, down from the previously announced target of 200,000 to 300,000.
Harvey said the company will continue to be guided by customer demand for electric vehicles in the future.
“You have to plan ahead for a number of years in terms of what you're going to do,” Harvey said. “If you have peaks and valleys along the way, we have the ability to increase production or decrease production a little bit to meet customer demand. I don't think we've over-invested in electric vehicles.”