General Motors dropped a ton of news about its electric vehicle plans yesterday that helps to underscore why the transition to EVs may be entering a new phase — even as sales remain tepid at best.
Driving the news: GM unveiled a broad lineup of electric vehicles powered by a new proprietary battery tech, representing a dramatic transformation of the 112-year-old automaker, Axios' Joann Muller reports from Detroit.
Why it matters: It's a $20 billion bet over the next five years that GM hopes both consumers and investors will endorse, she notes.
The company is walking a tightrope between maximizing sales of its profitable gas-powered trucks and SUVs and delivering on a long-term vision for a cleaner, less-congested world.
Quick take: There are reasons to think it's a bet GM has to make as what's now just a niche market grows in the coming decades. Here are a few things on my mind that signal why this will probably happen...
- Tesla, by far the dominant player in the U.S. market, seems to have righted its ship after flirting with disaster at times in recent years.
- Morgan Stanley, in a note Wednesday, forecasts that fully electric vehicles will hit 11% of global sales by 2025, 24% by 2030, 70% by 2040 and 82% by 2050.
- Just yesterday the European Commission released its proposed law to make the EU "climate neutral" by 2050, and the Brussels-based group Transport & Environment promptly concluded it "means the transport sector finally needs to begin its journey to a zero emissions future."
The big question: That would be how GM, and any legacy automaker, can survive the slow transition as some competitors adopt a different approach.
- "The current leaders at General Motors – and others in this business – are certainly spending money as if the future is all EV," Cox Automotive analysts said in a note.
- "Others still are playing it safe, developing a range of powertrains, envisioning a showroom with a mix of EVs, hybrids, plug-in hybrids and super-efficient internal combustion engines."
- They point out that in the U.S., total sales of fully electric cars were just 246,145. And Tesla accounted for 90% of them (!).
Where it stands: Via Joann, GM President Mark Reuss said the tipping point will come when carmakers solve all of the "pain points" currently keeping people from choosing an EV for their primary car — utility, driving range, charging infrastructure and value.
- The 10 electric models it showed reporters and analysts Wednesday — mostly trucks and SUVs, including three Cadillacs, two Buicks, two Hummers and three Chevrolets — go on sale starting in 2021.