Production Line Challenges and Customer Reluctance
Despite planning to invest $35 billion in development between 2020 and 2025, GM’s EV production has faced setbacks. The automated systems designed to fit battery cells in their vehicles have encountered major issues, leading to bottlenecks in their factories. This has resulted in a slowdown in production, with the Detroit factory producing as few as a dozen Hummer pickup trucks per day despite a reservation list of 80,000 vehicles.
In addition to production challenges, the market demand for EVs in the US has stalled. Many consumers find EVs too expensive, and the economic downturn has further curtailed sales. As a result, GM had to adjust its targets, abandoning plans to build 100,000 EVs in the second half of 2024 and another 400,000 by the first six months of 2024.
Impact on Partnerships and Driverless Car Ambitions
GM’s struggles have also affected its partnerships and aspirations in the driverless car market. A planned collaboration with Honda was cancelled due to the challenging sales conditions. Furthermore, GM has invested over $8 billion in Cruise, a San Francisco-based driverless startup in which it holds an 80% stake. However, Cruise faced difficulties, including a major recall of its entire fleet after an accident. Despite these setbacks, GM remains committed to its EV and driverless car strategies.
Mary Barra maintains her confidence in GM’s electric future despite the ongoing challenges. While the road to EV transformation may be bumpy, GM is focused on its goal of producing 1 million EVs in North America by 2025. Barra’s strategic vision and determination position GM to continue playing a key role in the rapidly evolving automotive industry.