October 16, 2021

Here’s why GM’s quest for electric vehicles is a huge risk

2 min read

Some auto industry analysts believe that GM’s goal to discontinue selling fuel-burning automobiles by the year 2035 will significantly impact the company’s overall market share if sales do not increase substantially. While electric cars are popular, and businesses like Tesla have stock prices that is going to make a legacy automaker jealous, industry insiders are concerned about the world’s readiness to transition to electric vehicles fully. According to companies that regularly study car buyers, many automobile purchasers are still worried about vehicle range and charge times.

GM, the largest carmaker in the United States, said its target of zero tailpipe emissions by the year 2035 is a goal, not a guarantee. Nonetheless, it invests heavily in pure electric vehicles, with over 30 new models due by 2025. Hybrids, which combine internal combustion engines (ICE) with electric power and are seen as a critical bridge between traditional fuel-burning automobiles and electrics, are not included in GM’s strategy.

Michelle Krebs, Cox Automotive analyst, said, “They have committed to going fully electric, not pursuing hybrids, not doing plug-in hybrids, and jumping immediately to electric vehicles.” “As a result, it’s a significant risk. It’s audacious and ambitious. And the concern is, well, can they do it when they say they’ll do it, especially given range prices and infrastructure issues?”

The automobile industry appears to be splitting into businesses that are investing in a variety of powertrains, including internal combustion engines, hybrids, and electric motors. Several automakers, such as Toyota, pursue other potential powertrain technologies, like hydrogen fuel cells. To be clear, GM has a few things working in its favor.

Many in the industry have praised its Ultium battery technology, which was developed in partnership with LG Chem. The batteries, according to GM, require significantly less cobalt and other elements than rival batteries, lowering costs to levels where electric cars can be competitive and profitable. The pouch-style cells, which look like boxes, can be stacked in numerous ways to fit a variety of vehicle designs.

GM is also introducing electric vehicles in segments where the business has had success, like sport utility vehicles and full-size trucks. Finally, GM has a history of adopting cutting-edge technology, from pollution-filtering catalytic converters to the engines that really can shut off cylinders to boost fuel economy.

However, some of such technologies did not strike a chord with buyers, and this could happen again. As a result, GM is attempting to develop items that drivers will truly want. “I believe that is one of the keys,” said Sam Abuelsamid, chief analyst at Guidehouse Insights. “The things that are coming that haven’t been officially revealed yet are the ones that I believe will appeal to the market for more; the kinds of automobiles that people today truly want to buy.”

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