GM Wants To Create An Airtight Battery Supply Chain To Prevent Future Parts Shortages

Dec. 11, 2022 8:53 AM ET by Jarryd Neves Electric Vehicles / Comments

Lessons learned from the chip crisis are being used to build an impregnable supply chain.

Using lessons learned from the chip crisis, General Motors is striving to create a battery supply chain that is impervious to crippling industry issues, reports Automotive News.

America's biggest automaker wants to tackle the EV segment head-on but can only do so if it has a strong and flexible supply chain. GM CEO Mary Barra said the company wants battery suppliers, existing and new, to source materials from multiple locations. This would allow General Motors to better secure EV materials for production and create a built-in redundancy that would eradicate production stoppages due to shortages from one supplier.

The ongoing chip crisis has taught the wider automotive industry about the dangers of not having enough supply to meet demand. Volkswagen followed a similar tactic earlier this year. With looming gas shortages in Europe, VW decided to stockpile vehicle glass and windscreens.

GM has entered into agreements with suppliers to secure the battery materials it needs to produce a million electric vehicles in North America in 2025.

"We want to have a partnership where we both win together," said Barra. "A lot of times, these are suppliers that are new to us, and so I'm excited about how we're proceeding on that. And, like I said, why do I feel confident? Because we got signed agreements. And we'll just keep building on that."

The automaker, which debuted an onslaught of EVs in recent months, is leaving nothing to chance and plans to have an emissions-free lineup by 2035. Thanks to an alliance with LG Energy Solution, the automaker will have four plants producing its Ultium batteries across the USA.

But how does General Motors plan to get people into dealerships and behind the wheel of its EVs? Simple - make them desirable and great to drive.

"Our premise always at General Motors has been: Let's just create such great electric vehicles and solve the charging issue for people that they want them, as opposed to being from a regulatory perspective pushed into them because that's when you've got to worry about what your profitability looks like," added Barra.

That ethos is working, with the CEO noting that 40% of orders for GM electric vehicles are from new customers. Vehicles such as the bewitching Celestiq, the desirable GMC Hummer EV Pickup, and the sensible Equinox EV (to name a few) cater to different markets. These vehicles may someday give the automaker a stronghold in the electric vehicle segment.

General Motors is also banking on the new EV tax credit that forms part of the Inflation Reduction Act. The new legislation will see certain electric vehicles qualify for a $7,500 discount, which might be enough of an incentive to increase EV sales.

Moreover, the State of California's decision to ban the sale of ICE vehicles from 2035 will also encourage growth. The coastal state is the country's biggest car market, and GM will have a substantial range of vehicles to offer Californian customers.

With New York poised to follow suit, electric car sales are only expected to rise in the coming years.