Can GM do what no other company has done so far?
It doesn't matter where you look within the industry, manufacturers haven't started to profit from electric cars as of yet. We have seen companies like Coda go bankrupt after trying to bring out an affordable electric car and some reports indicate that Faraday Future may be going down a similar path due to a lack of capital. Even Tesla, the company that has now become synonymous with EVs, has never made a profit and blows through cash at a rate of $8,000 every minute. One thing is for sure, making money on electric cars isn't easy.
General Motors is hoping to change that. Reuters reports that GM CEO Mary Barra has made a promise to investors that the company will make a profit on EV models by 2021. Unfortunately, Barra did not elaborate on what GM would specifically be doing in order to accomplish something that no other manufacturer has been able to do. According to six current and former GM and supplier executives, the answer may be a combination of proprietary battery technology, flexible vehicle design, and production in China. If Barra's plan is successful, GM will have two main sources of revenue in the next decade.
The first revenue will come from the US, and focus on trucks and SUVs that are powered by petroleum. GM's global business will be focused around electric cars and pay-per-use services such as ride sharing and robo-taxis. The Chevy Bolt has been a step in the right direction to show that GM can compete with Tesla. GM's plan to reduce the cost of the Bolt will be to lower the amount of cobalt needed for the batteries. Cobalt prices have surged due to high demand from automakers, so finding a way to use less of it would help bring down costs. Experts say that the Bolt's battery currently costs $10,000-$12,000, which is around one third of the car's $36,000 price.
GM hopes that the cost can be as low as $6,000 by 2020 while improving the range by 45%. Automakers are working tirelessly to improve battery technology so that electric vehicles can be more desirable. Tesla may capture most of the headlines, but GM is doing its part to move the electric vehicle forward.