GM’s $20 Billion Electric Plan Is a Shot at Tesla’s Valuation
Today on Speed Lines: Can GM catch up?
Welcome back to Speed Lines, The Drive's morning roundup of what matters in autos, tech, and more. It's Thursday, which is great because it's almost Friday. Let's begin.
GM Aims At The 'Wall Street Skeptics'
General Motors executives have said for some time that they see the company's future as an all-electric one. But yesterday in Warren, Michigan, we got the first tangible road map for how that's going to happen. At GM's EV Day event, we learned of a new joint venture with LG Chem, a new third-generation electric powerplant with 400-volt and 800-volt battery packs, platform flexibility and super-fast charging. It's a $20 billion plan.
In terms of products, here's what that means from the automaker itself:
Chevrolet, Cadillac, GMC, and Buick will all be launching new EVs starting this year.
The next new Chevrolet EV will be a new version of the Bolt EV, launching in late 2020, followed by the 2022 Bolt EUV, launching Summer 2021. The Bolt EUV will be the first vehicle outside of the Cadillac brand to feature Super Cruise, the industry's first true hands-free driving technology for the highway, which GM will expand to 22 vehicles by 2023, including 10 by next year.
The Cruise Origin, a self-driving, electric shared vehicle, shown to the public in January 2020 in San Francisco, was the first product revealed using GM’s third-generation EV platform and Ultium batteries. Next will be the Cadillac Lyriq luxury SUV in April. Details about its launch will be shared then. The reveal of the Ultium-powered GMC HUMMER EV will follow on May 20. Production is expected to begin in Fall 2021 at GM’s Detroit-Hamtramck assembly plant, GM’s first assembly plant 100 percent dedicated to EV production.
In other words, a big onslaught of new EVs across all the GM brands. Behind what the Volkswagen Group is doing, it's maybe the most ambitious electric play by a legacy automaker we've seen to date. The names of those Cadillacs are quite unfortunate, but I give them major points for trying.
GM has plenty of reasons for this EV strategy, from the needs of the ever-important (yes, even now) Chinese market to tightening emissions standards across the world—particularly in Europe. But there are financial reasons for it too. Like Ford, GM has been unable to convince Wall Street analysts and investors that it can survive the electro-mobility revolution, let alone another economic downturn, which is why it has a valuation that's a fraction of Tesla's.
Here's the Wall Street Journal:
Investors so far been putting their money on Tesla Inc. as the company best positioned to capitalize on a big swing toward electric vehicles. Tesla’s valuation has soared to more than $130 billion, roughly three times as large as GM’s.
“I think General Motors is undervalued. I really do,” said Chief Executive Mary Barra. “We’re bringing the power and might of General Motors” to grow electric-vehicle sales, she said Wednesday.
The company’s shares were ahead about 2% Wednesday afternoon. They are down about 20% over the past year.
[...] The rush to invest in this technology comes as questions remain about consumer demand, profitability and the availability of public charging stations.
GM executives reiterated that the future generation of electric cars will be profitable, unlike GM’s lone electric entry in the U.S. today, the Chevy Bolt, which loses several thousand dollars per sale, current and former employees have said.
Profitability is crucial here, and I think that's why GM is leading its EV charge (pardon the pun) with more expensive, more premium brands like Cadillac and the reborn Hummer. Hopefully the new Bolt and Bolt UEV can cover the spread by being more accessible to normal folks.
GM North America Safe From Coronavirus, For Now
Meanwhile, CEO Mary Barra stressed that while the coronavirus outbreak in China has hammered every automaker's production and supply chains, things aren't disrupted in North America. At least, not yet. From Reuters:
General Motors CEO Mary Barra said on Wednesday the automaker's North American vehicle production should be secure from parts shortages caused by the coronavirus outbreak "quite far into this month."
Meanwhile, car sales in China, GM's biggest market, plummeted 80 percent in February, as consumers fearful of infection or restricted by government quarantine measures stayed away from showrooms.
"The market will come back" in China, Barra said, in comments to reporters at GM's design center in Warren, Mich., near Detroit.
What's New With Waymo's Jaguar Fleet
One more from Wired today: let's check in with the upgraded fleet of autonomous Jaguar I-Pace test vehicles that just got delivered to Google's Waymo.
To borrow an auto industry phrase, this is more than a “facelift,” a package of minor changes designed to refresh a stale model. Over the past several years, hundreds of Waymo engineers have rebuilt most of the company’s self-driving hardware, chiefly the cameras, lidars, and radars that perceive the world around the car. They did almost all of the work in-house and from scratch. Now the electric Jaguar (which Waymo, inexplicably, declined to dub the I, Robot-Pace) is the first vehicle to benefit from the company’s fifth-generation hardware suite.
All told, the vehicle can now see farther and in more detail, says Satish Jeyachandran, Waymo’s hardware lead. The cameras, for example, now collect useful data from more than 500 meters out. All the sensors can see through and survive in nasty weather. The system can be readily reconfigured to work as well on Waymo’s 18-wheeler as on the I-Pace. Just as important, Waymo says it can produce the components in adequate numbers for a commercial self-driving fleet. “We wanted this generation to be much more scalable and manufacturable and reduce the costs of the system by half,” Jeyachandran says. “I'm super confident that we are pretty close to achieving all of these metrics.”
That gets pretty deep into the technical details behind these self-driving prototypes, but if that's your bag, it's worth a read in full.
On Our Radar
Continental 2019 adjusted profit falls as vehicle demand slumps (Automotive News)
Read These To Seem Smart And Interesting
What It Would Mean to Cancel SXSW (Texas Monthly)
Your Phone Is a Cesspool of Germs. Here's How to Actually Clean It (Popular Mechanics)
The infinite scroll (Columbia Journalism Review)
On GM's big electric announcement: is there anything you're particularly excited about?
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