When it comes to electric vehicles (EVs), Tesla is the “face” of this market in the US. In fact, there are some people who believe that Tesla is the only manufacturer of electric vehicles in the world. However, this is far from the truth, as there are a good number of EVs from more established car brands. According to InsideEVs, General Motors will focus on producing low-cost electric vehicles. This will serve as one of the strategic moves of the company to surpass Tesla.
General Motors CEO Mary Barra said in an interview with Yahoo Finance a few days ago that GM wants to replace Tesla as the world’s largest electric car maker by making cheaper electric cars. Of course, it is obviously trying to take advantage of the low-end EV market that Tesla is currently ignoring.
“GM is doing everything and in five years we will be selling more electric cars in the US than any other car company, including Tesla,” said Mary Barra.
Mary Barra claims in an interview that in addition to the release of high-tech models, GM will also launch electric vehicles under $ 30,000. The company hopes to gain further market share through a high-end + cheap strategy. As a leader in the age of fuel vehicles, General Motors has also made great strides in transforming electric propulsion. The company recognizes that there is still a long way to go and will continue to maintain its leadership position.
The top three startegies that GM hopes to use to overtake Tesla
1. Launches New Cars Under $ 30,000 – Goes to Work with Honda to Reduce Costs
Earlier last month, General Motors and Honda announced that the two sides would work together to develop a range of low-cost electric vehicles based on a new joint platform. This collaboration will take full advantage of the two companies’ advantages in technology, design and supply chain.
Electric vehicles co-produced by GM and Honda will include popular categories such as the compact electric crossover. The industry expects these electric vehicles to be officially launched in 2027. In addition, in order to reduce costs and lighten the burden on consumers, the two automakers will work together on electric vehicle battery technology in the future. This will help further reduce the cost of electricity. It will also improve the performance of electric vehicles and promote vehicle viability.
In addition, the two companies will work to standardize equipment and procedures to achieve high quality and low cost vehicles through mass production. Looking at GM’s upcoming models, there are relatively cheap ones. The 2024 Chevrolet EV and another EV will start at less than $ 30,000.
At the moment, General Motors’ cheapest electric car is the Chevrolet Bolt electric car, which starts at $ 31,500. For his opponent Teslaits cheapest EV is the Model 3 which sells for $ 46,990 and the price of this car is also rising.
Among the electric vehicles that General Motors recently introduced or will launch this year, the Chevrolet Silverado electric pickup is the cheapest, priced at $ 39,900. Higher class models such as the Cadillac Lyriq and GMC Hummer electric vehicles are on the luxury market. These EVs come with starting prices of $ 58,800 and $ 79,900 respectively.
2. GM’s huge investment in US $ 7 billion in electricity
In January of this year, General Motors issued an investment announcement totaling $ 7 billion. GM claims that by 2024, it will invest more than $ 7 billion in four production bases in Michigan to increase production of electric pickups. According to the investment announcement, GM will invest $ 2.6 billion through the LG New Energy consortium in Michigan to build a new battery plant.
There are also reports that the new battery plant covers an area of approximately 260,000 square meters and will be operational by the end of 2024. This is also GM’s third battery plant in the United States. The other two – a battery plant in Lordstown, Ohio and another in Tennessee – will be shut down later this year and in 2023 respectively. There are speculations that General Motors will probably set up a new battery factory.
3. Joint operation: GM for cooperation with raw material companies
In order to accelerate the transformation of the electric vehicle business, GM has indeed partnered with a number of raw material companies. In December, GM formed a joint venture with German company Vacuumschmelze (VAC) to build a plant in the United States. This plant will make permanent magnets for electric motors for future GM electric vehicles.
GM also has a joint venture with South Korean battery materials company POSCO Chemical. Both companies will build a plant in North America to process battery materials for GM’s Ultium electric vehicle platform. We undertake that the consortium will produce “Cathode Active Material” (CAM), a key battery material. According to GM, CAM accounts for about 40 percent of its battery cost.
In October 2021, General Motors announced a strategic supplier agreement with North Carolina-based semiconductor company Wolfspeed. They will jointly develop and supply silicon carbide (SiC) energy solutions for GM’s future electric vehicles.
Conclusion: GM is fighting for a switch to electric propulsion
In 2021, Tesla’s share of the global electric vehicle market is approaching 14%, compared to 7.6% for General Motors. According to media reports, in January of this year, Tesla sold 37,162 vehicles in the United States (an increase of 49% year on year). This accounts for nearly three-quarters of the U.S. electric vehicle market. At the beginning of 2022, although sales of purely electric vehicles in the United States increased significantly compared to the same period, most of the market share is still occupied by Tesla.
GM has accelerated the transformation of electric vehicles by investing and cooperating in the field of electric vehicles. The company also has a well-established goal of “surpassing Tesla”. It seems that this traditional car company is anxious about the transition to electric drive.
However, from the current point of view, the difficulties facing GM are still painful. Of course, as long as General Motors goes up, Tesla will not stand still. Tesla CEO Elon Musk has previously stated that he will launch a $ 25,000 EV. Although it is currently lagging behind, GM’s low pricing strategy will compete with Tesla. In the event that GM launches a low-end model and makes waves, Tesla will do the same. Whether it can overtake Tesla or not, it can close the gap and have a place in the power wave.