GM CEO Mary Barra has publicly announced that the automaker will make money on EVs by 2021, and a recent panel interview provides insight into exactly how this might unfold.
No automaker has been able to say this thus far. Tesla, a leader in battery-electric vehicles, continues to burn through cash. Toyota has a handful more battery-related patents than GM and has been successful in the hybrid segment for several years, however, the automaker still hasn't jumped headfirst into pure electric vehicles.
So, how can GM promise such success in only a few years?
Unfortunately for the U.S. -- according to a panel of current and former GM execs and other industry experts interviewed by Reuters -- it's likely going to happen due to huge EV/battery production in China. In the meantime, in order to keep cash coming in to fund such pursuits, GM will also focus heavily on traditional trucks, SUVs, and gas-powered cars in North America.
By the middle of the 2020s, the automaker will then have two separate ventures running in tandem. The China-based global electric car company and the traditional model out of North America. In addition, GM is investing heavily in future mobility, including self-driving, ride-sharing, and pay-per-use systems, like robotaxis.
Many people doubt GM CEO Mary Barra's ability to pull this off since most EV adoption thus far has been fueled by government incentives rather than consumer acceptance. Nonetheless, the automaker has plans in place in an attempt to prove it can work.
One such plan is to reduce the amount of cobalt used in its new EMC 1.0 battery system. Cobalt drives up the cost of lithium-ion batteries significantly and it's getting more expensive due to increasing demand. Instead, the new systems will use more nickel, which will not only make them more cost-effective, but also more energy dense. The automaker is also working on more efficient battery packaging strategies and cooling methods.
Pam Fletcher, GM's vice president of global electric vehicle programs, wouldn't elaborate on specifics. However, she explained that there are other advancements that the automaker is choosing to keep quiet:
Chevrolet Bolt EV
“There’s a lot of stuff that we choose not to patent because we don’t want to make it visible.”
All-in-all, GM says it can reduce battery cell costs by more than 30 percent, resulting in a sub-$100 cell cost by 2021. Currently, the pack in the Chevrolet Bolt EV is reported to cost about $10-12K, for a car that starts around $36K.
Former GM engineering director and consultant Jon Bereisa says that the same battery pack will cost as little as $6,000 by 2021. Additionally, Bereisa explained that the next-gen Bolt "could deliver a 45-percent increase in range for about the same (battery) pack cost, or the same range at 45 percent less pack cost.”
While several other automakers have made repeated announcements about investments in EVs and future vehicles, GM has made obvious and visible strides as of late. The company sold failing European affiliates and put an end to work in markets that were proving unsuccessful. This has freed up cash flow, resources, and bodies to focus on new efforts. Now, GM has 1,700 employees solely focused on electric vehicles.