American legacy automaker General Motors has once again announced plans to slow down its electric vehicle push despite recording sales growth, CNBC reported.
GM scales back electric Buicks and Silverado factory plans
On Tuesday, General Motors formally announced plans to further scale back its electric vehicle push.
This recent strategy pivot postponed GM’s second electric truck factory for Silverado EV production in the United States and the first Buick electric car launch.
As per the report, GM postponed the Michigan electric truck factory retooling by six months from the previous “late 2025” schedule to “mid-2026.” Consequently, GM cannot hit its goal of 1 million electric vehicle production capacity in North America by 2025
Interestingly, GM Chief Executive Mary Barra also did not release an update on Buick’s first electric car arrival. For context, the company is expected to unveil this inaugural model this year.
Buick seeks to become an all-electric brand by 2030, aligning with GM’s strategy to only sell consumer electric vehicles by 2035.
Affecting factors
GM’s electrification strategy delay does not appear to be due to technical issues in the planned electric vehicle factory. It seems more like the typical “uneven demand” delays on new electric vehicle investments.
As GM CEO Mary Barry implied during the Q2 2024 Earnings Call on Tuesday, the apprehension over the upcoming election is not helping things for them.
Nonetheless, GM is “committed to growing responsibly and profitably.”
GM Chief Financial Officer Paul Jacobson also explained that the American legacy automaker is currently basing its strategy on customer demand and potential political influence.
“We continue to make sure we continue to scale the business to customers and where they are at. I would say what’s really important to the company overall is to have regulatory certainty. We’ll be watching with interest as we get past the election and look at what the regs will be if they change at all. But I think we have the flexibility to moderate based on what we see.”
GM CFO Paul Jacobson2
GM EV sales
GM’s electric vehicle sales in the US market surged 40% to 21,930 units in the second quarter of the year compared to the same period last year.
Despite this notable increase, EVs still accounted for a small portion (3.2%) of its overall vehicle sales in the US in Q2 2024.
CFO Jacobson asserted that the company plans to accelerate EV assembly to hit production and vehicle wholesales of 200,000-250,000 units in the North American market in FY 2024. He also disclosed that GM’s wholesale reached approximately 75,000 new EVs in H1 2024.
Despite the scaleback, GM apparently remains committed to achieving profitability on a production or contribution-margin basis once it hits 200,000 unit output by Q4 2024.
