GM’s EV sales momentum is finally picking up

WARREN, Mich. – If everything had gone according to plan. General Motors Over the past three years, Detroit automakers would have been well on their way to catching up. Tesla In electric vehicle sales.

In October 2021, GM CEO Mary Barra declared that the company would “absolutely” catch up with the U.S. EV leader by 2025. But slower-than-expected EV adoption across the industry and GM-specific challenges in production, software and supply chain have left the company well behind Elon Musk’s automakers, Hyundai/Kia and GM. Ford Motor Company.

GM has backed away from most of its previously announced electric vehicle goals, but the company believes electric vehicle sales are finally starting to gain traction with a growing lineup of all-electric vehicles that range in price from about $35,000 to more than $300,000.

“We are absolutely outperforming the industry in terms of EV growth,” Rory Harvey, GM’s president for North America and global markets, told CNBC. “We now have the most comprehensive EV lineup of any U.S. manufacturer.”

GM saw a notable increase through August, according to EV sales data provided to CNBC by the Detroit automaker, which publishes sales figures quarterly. GM sold about 21,000 EVs in the U.S. in July and August, roughly the same number of EVs it sold in the second quarter. GM’s EV sales through August were up about 70% compared to a year ago.

“This is a major change in the capabilities of our EVs,” Harvey said in an interview this month at GM’s Cadillac headquarters outside Detroit.

GM’s EV sales hit a record high for the second straight month, trailing Ford by about 2,000 units through August, but fell more than 20,000 units behind Hyundai/Kia’s EV sales through last month, both of which report monthly sales.

Traditional automakers are vying for second place with Tesla a distant second: Motor Intelligence estimates that Tesla sold more than 164,000 EVs in the second quarter, roughly double the combined sales of GM, Hyundai/Kia, and Ford during the same period.

Harvey declined to say if or when GM plans to overtake competitors in EV sales, but the company expects strong performance through the end of the year.

“We have momentum,” Harvey said. “We expect EV adoption to be strong in the fourth quarter, so we’re looking forward to that close and want to capture a big share of the upside.”

GM currently offers eight “Ultium-based” EVs to consumers, which are based on the company’s electric vehicle architecture and battery technology.

The lineup ranges from mainstream models like the Chevrolet Equinox and Blazer crossovers to three full-size pickup trucks and Cadillac’s luxury models, including a custom-built $300,000 Celestique. Two more Cadillacs are expected to join the lineup by the end of the year — an electric Escalade and the entry-level Optique crossover — bringing the lineup to an industry-leading 10 models.

“They’re doing what they said they’d do. Their plan was to get Altium in a lot of cars relatively quickly,” said Stephanie Brinley, principal auto analyst at S&P Global. “It didn’t come online as quickly as they would have liked, but that was the plan.”

By comparison, Tesla’s five vehicles range in price from about $39,000 for the Model 3 sedan to more than $100,000 for the Cybertruck. Hyundai, including its luxury brands Genesis and sister Kia brands, has a lineup of nine cars and crossovers ranging from about $34,000 for the Hyundai Kona electric vehicle to $80,000 for the Genesis G80.

With such a large range of vehicles, expectations for increased sales are high: The company has spent billions of dollars developing vehicles, and now “the pressure is on to sell,” Mr. Brinley said.

“The pressure is on to lead and meet consumer demand,” she said, “but it will be 10 to 15 years before EVs become dominant over cars. [internal combustion engines]It may still be some time before consumers warm to it.”

Cox Automotive expects EVs 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.

Selling more EVs is still a bit counterintuitive for GM: EVs have much lower profit margins than their gas-powered cousins, but the company expects EVs to become profitable on a production, or contribution, basis once production hits 200,000 by the fourth quarter.

EVs can also help Toyota meet tougher federal fuel-economy standards and have been a major growth area under Barra, who has not yet fully backed away from a January 2021 goal to offer only all-electric vehicles to consumers by 2035.

Harvey told CNBC the company has “a lot going on right now with roadshow events, getting customers into our vehicles and making sure our dealerships have the right level of EVs in their fleets.”

“In America they say, ‘A seat sells a car,’ but in Britain they say, ‘A feel at the wheel closes the deal,'” says Harvey, who is originally from the UK. “But it’s the same thing.”

Barra said that would be determined by customer demand, but the 2035 goal was a transformative one for GM. The Detroit automaker was the first established automaker to go “all in” on EVs and realign its business to focus on them, and has also announced several other goals that have since been rescinded or adjusted.

The scrapped 2025 goals include increasing EV production capacity to 1 million vehicles in North America and making EVs profitable to rival gasoline-powered cars. The status of other goals, such as achieving $50 billion in revenue from all-electric vehicles by next year, is unclear.

GM is maintaining its short-term goal of producing 200,000 to 250,000 EVs this year, but that range has been revised down from a previously announced target of 200,000 to 300,000.

Harvey said the company will continue to respond to customer demand for EVs.

“We have to look ahead several years and have a plan for what we’re going to do,” Harvey said. “If we see peaks and dips along the way, we have the scope to either increase production or reduce it a little bit to meet customer demand. I don’t think we’ve overinvested in EVs.”