General Motors
The Cadillac Lyriq, which is expected to come to market early next year

GM CEO Says Company Can Catch Tesla in EV Sales by '25

Oct. 27, 2021
The auto giant’s CFO told analysts big investments are being made more efficiently.

General Motors Corp. Chair and CEO Mary Barra on Oct. 27 stuck out her neck and said the Detroit-based auto giant can close its gap to electric-vehicle market leader Tesla in the next four years.

“Absolutely,” Barra told CNBC’s Phil LeBeau when asked about GM’s recently voiced aspirations to be the EV market leader. “When people get into these vehicles, they are just wowed. We will be rolling them out and we’re just going to keep working until we have No. 1 market share in EVs.”

Barra made her comments on the heels of GM’s third-quarter earnings report, which showed drops in sales and profits from the same period a year ago. She and CFO Paul Jacobson said the semiconductor shortage and rising commodity and logistics hurt sales during the three months ended Sept. 30 but added that they now expect GM’s adjusted earnings per share and cash flows from auto operations to finish this year higher than their previous forecasts.

Catching Tesla will be a very big ask, even over a multiyear span: The company founded by Elon Musk produced 238,000 vehicles during the third quarter and controls about 60% of the EV market versus GM’s 9%. But Barra and her team are planning for big growth in their portfolio: GM will soon begin to deliver an electric Hummer model and expects to launch the Cadillac Lyriq early next year. On the heels of that will come, among others, a Chevrolet Silverado and a GMC model.

The big goals: Have a range of more than 30 EVs at various price points by 2025 and have EVs account for at least 40% of GM’s forecasted revenues of roughly $300 billion by 2030. As sales rise, Barra told analysts and investors on a conference call Oct. 27, the EV business’ margins will grow in large part because of its Ultium battery and charging platform and more rapid product development.

Jacobson told analysts GM’s investments in those initiatives and other capex projects will be between $9 billion and $10 billion in 2022 even though they fell to $1.8 billion in the third quarter. Two factors in that drop, he added, were “innovative work” by the GM team as well as the timing of certain invoices.

“Everything is progressing on schedule and on target,” Jacobson said. “The efficiency of the investment […] has gotten better.”

Looking ahead to 2022 and the expected ramping up of production that an easing of the chip shortage should bring, Jacobson said GM wants to build its dealers’ vehicle inventory, which ended September at 129,000 versus 492,000 a year earlier. (In past years, GM’s inventories regularly stood at 800,000.) Jacobson said the company wants to grow inventories next year and make sure dealers don’t have empty lots. But he added that, given strong demand from buyers, “opportunities to build inventory will be somewhat limited.”

GM shares (Ticker: GM) were down more than 5% in midday trading Oct. 27. Over the past six months, they have fallen about 8%.

Popular Sponsored Recommendations

State of Sales Report

Sept. 12, 2023
Discover the latest insights driving productivity and efficiency for more than 7,700 sales leaders and professionals.

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!