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Should Automakers Take Note of General Motors' EV Plans?

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Rimmi Singhi
·7 min read
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As people get deeply concerned about rising fuel prices and growing climate crisis, electric vehicles (EVs) seem to be the best solution in hand. Automakers, thus, are working to tap the growing EV market. General Motors GM appears to be going all out to embrace an electric future and gain a strong foothold in the fast-growing market. The company laid out its comprehensive strategy to launch an impressive lineup of battery powered vehicles on its EV Day held recently.

General Motors’ Big EV Push

The top U.S. carmaker aims to spend more than $20 billion through 2025 to launch gen-next EVs powered by new-low cost batteries. General Motors plans to roll out 11 new EVs as part of its ambitious plans through 2025, including at least 20 new models by 2023.

The key element of the automaker’s strategy is the new battery system ‘Ultium’, which is set to power General Motors’ EVs starting next year. The batteries developed in partnership with LG Chem will enable up to 400 miles of range or more. Importantly, battery cell costs will reduce to less than $100 per kilowatt-hour, at which the EVs become cost-competitive with internal-combustion models. 

All four brands of the company including Chevy, Cadillac, GMC and Buick are set to launch new battery-powered vehicles.The new models will include Chevron Bolt EV and EUV, two Buick SUVs, GMC Hummer in both SUV and pickup formats,Cadillac Lyriq SUV and Cadillac sedan Celistiq.  The auto giant is aiming to sell a million EVs annually by 2025 in the United States and China.

GM Has TSLA in the Crosshairs With Amazing EV Lineup

With General Motors revving up stakes in the EV landscape, it is giving tough competition to market leader, Tesla TSLA. Last year, the company sold 367,500 cars worldwide and sales are only expected to go up, going forward. Tesla is already riding high with record deliveries of Model 3, a planned Gigafactory in Berlin and ramped up production at Giga 3. Impressive sales of existing products, ambitious product lineup including Model Y, Semi truck, Model S Plaid and Roadster, along with a new battery technology are expected to bolster its income. Last year, Musk said that the company is working on new battery packs that will last for 1 million miles. He said “The new battery pack that is probably going to production next year is designed explicitly for 1 million miles of operation.” Tesla’s acquisitions and Musk’s comments on battery manufacturing signal that it’s going to soon build its own battery cells. Both General Motors and Tesla carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EV Momentum Gaining Pace, Competition Heating Up

Stricter emissions and fuel-economy targets are boosting the environmentally-friendly EV market. The EV momentum is expected to reach a new level in the coming years with various attractive, long-range and reasonable vehicles set to be rolled out. According to a Deloitte report, EV sales are expected to cross 4 million by 2020 and may touch 21 million in 2030. Currently, EVs and hybrids make up around 2% of the total automotive market, according to both Deloitte and IHS Markit report. Deloitte expects growth in EV sales to lead to 10% market share gain by 2020.

For years, it seemed that Tesla was the only automaker that was playing at the forefront of the EV phenomenon.However, things are changing with various major automakers like Ford F, Volkswagen VWAGY, Daimler AG, BMW AG BAMXF, Toyota Motor TM and Hyundai betting big on the EV market.  With its big plans to capture the EV market, General Motors is indeed intensifying competition and trying to make the case that it isn’t far behind Tesla, which has attained the reputation of gold standard over the years. However, it’s also worth taking a look at the other auto biggies risking billions on EV development.

What Are Ford, Volkswagen & BMW Up To?

Ford aims to spend at least $11.5 billion on vehicle electrification through 2022.The company is working to introduce fresh models of electric vehicles, which seem to be the future of the auto industry. It is set to release an all-electric version of its popular Transit cargo van next year. In addition to Transit, Ford is also set to launch electric version of its F-150 truck, all electric Mustang Mach-E SUV along with several plug-in hybrid models.

In a bid to keep pace with the EV wave, German auto giant Volkswagen is also boosting spending on electric cars, hybridization and digitization.Per the five-year (2020-2024) investment budget of Volkswagen, it will be spending 60 billion euros in electric cars, hybrid technology and digitalization over the said time frame. Deliveries of ID.3, one of Volkswagen’s most ambitious EV projects, is expected in 2020. ID.3 features Volkswagen’s Modular Electric Toolkit, also known as MEB platform. The Volkswagen Group is ready to produce 33 more vehicles on the MEB platform in the next three years. Through 2029, Volkswagen has pledged to launch 75 all-electric models and produce nearly 26 million e-vehicles. It aims to sell around 6 million hybrid vehicles by 2029.

BMW AG, which did not launch any EV after the debut of its i3 model in 2013, is set to roll out three new models over the next two years. The BMW i4, along with the BMW iNEXT, an all-electric crossover, will enter the market in 2021 while the BMW iX3, an all-electric SUV, is due to go on sale by the end of this year. With the growing popularity of greener vehicles, the firm expects its worldwide EV sales to increase more than 30% each year. BMW targets to have 25 electrified models in its lineup by 2025. It will create flexible vehicle architecture to offer fully-electric vehicles, plug-in hybrids and models with combustion engines, enabling the company to adapt to ever-changing market conditions.

Japanese Auto Bigwigs Also Gearing Up

Toyota is also ramping up its electric-car rollout in response to global demand.Reportedly, six new Toyota EV models will be launched this year. A compact crossover built on e-TNGA platform will be manufactured in partnership with Subaru. There will also be a small car (to be developed in collaboration with Suzuki and Daihatsu), as well as another crossover (which is hinted to be an electric version of the C-HR crossover), a compact sedan, a minivan, and a mid-size SUV. Another Japanese giant Nissan Motors will introduce seven new EV models within the next three years.Honda has also stepped up its EV efforts. The firm intends to electrify two-thirds of its global lineup by 2030. It aims to electrify all its offerings in Europe by 2025., most of which will be hybrids. Honda expects EVs to account for 15% of its 2030 sales.

Final Thoughts

The shift toward adoption of EV is happening faster than expected globally and before long, investors could be looking at the mass adoption of these. The decade beginning 2020 could be the one wherein EV market share may grow exponentially, with prices for green vehicles reaching parity with their fossil fuel-powered counterparts.As technological advancement and affordability of these cars substantially increase, one should consider investing in the growing global EV market to make the most of this revolution.

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