The automotive industry is changing. Automakers have said it. Analysts have said it. And consumers are driving it—at least in the U.S. The future of the automotive industry remains unknown; however, there are indicators for where it’s going. Right now, General Motors is in the midst of transforming its business model. It’ll have to survive in an ever-changing marketplace dominated by new technologies, new competitors, and new problems. As GM shifts course, heading for a new port in uncertain seas, the company will make early sacrifices in hopes of making it out from the storm unscathed.
Those sacrifices have consumed the automotive news cycle. In November, General Motors announced a massive restructuring, hoping to save $6 billion by 2020 by idling five North American factories, discontinuing models like the Chevrolet Volt and Buick LaCrosse, and laying off thousands, including white-collar employees. GM’s plan has frustrated employees, riled unions, and angered politicians. But the automaker is maintaining its course as everyone watches.
20 New Electric Vehicles By 2023
While consumers are driving change at home—growing the popularity of crossovers, SUVs, and trucks—government regulators in China and Europe are driving the change there, enacting new regulations calling for hybrid and electric vehicles. Tyson Jominy, managing director of the data and analytics consulting group at J.D. Power, said in an interview with the Detroit Free Press global electric vehicle sales are expected to hit 18 million by 2030.
China alone will account for 7.5 million of those, Jominy added, largely through mandates and regulation that steer customers towards electric vehicles. In the United States, EV adoption is expected to be far slower, selling 100,000 electric vehicles a year through 2025. That’d put the market at 700,000 EV sales in the U.S., which would be about five percent of the retail car market.
Considering GM’s success in China, an electric vehicle agenda stands to benefit the company in that market significantly.
General Motors has gone on record that it plans to release 20 new electric vehicles by 2023, which will ride on an all-new scalable architecture, should things go according to plan. An all-new Cadillac crossover will be the on of the first vehicles to lead the company’s electrified assault. Missing from that plan is an electric pickup truck, something Ford is currently developing.
We’re told the future is electric, and General Motors CEO Mary Barra champions that. She’s hinted at an electric pickup truck that could be an EV Chevrolet Silverado. However, rumors have swirled suggesting GM is interested in investing in Rivian, a Michigan-based EV start-up that revealed the R1T truck last year. With 400 miles of range and 11,000 pounds of towing capacity, the Rivian would be a polite ambassador from GM to truck enthusiasts.
No Pedals, No Steering Wheel
Electric vehicles aren’t the only new technology on the horizon. Self-driving vehicles, in one capacity or another, will soon buzz through city streets taking passengers across town without a human at the wheel. Full adoption of self-driving cars is decades away as companies fine-tune the necessary technologies. This is another emerging slice of the future automotive profit pie—and GM, a leader in AV development, plans to capitalize on the growing market.
According to Jominy, there will be four million self-driving cars on the road—in ride-sharing fleets—by 2030. Jominy added personal ownership of self-driving cars would start around 2030 as well.
We’ll have to see how that actually plays out. No doubt, tech hubs like San Fransisco and the Bay Area will welcome these vehicles. But autonomous vehicles face every headwind from consumer preference, to resistance from taxi companies, to legal framework.
In 2016, General Motors bought a small start-up with just 40 employees called Cruise and renamed it GM Cruise. The self-driving GM subsidiary has grown substantially since, employee 1,100 people in 2018. The company has a valuation of $14.6 billion and plans to roll out a ride-sharing service later this year based on its Cruise AV cars. The automaker has about 180 electric Cruise AVs tooling around, mostly in San Francisco, where the ride-sharing service will likely deploy first.
Securing “The Future”
There’s little joy in the layoffs, plant closures, and discontinuation of iconic models. Times are tough for those affected, but the strong economy should help most land on their feet. GM’s restructuring is cutting costs so it can invest in its future. The last thing the automaker wants is another bankruptcy brought about by naiveté, ignorance, or some deadly combination of the two.
Investing in companies like Cruise and (if GM does so) Rivian can give the automaker an edge. Spreading investments into several different companies gives GM a better chance of seeing a profitable return. If GM can weather the storm and successfully chart a new course for itself, the payoff could be huge, according to LMC Automotive’s Jeff Schuster, who also spoke with the Free Press.
The automotive world appears to be broadening, and GM is trying to prepare for success.
Comments
Who wants this?? What person woke this morning and said I want to own an electric vehicle that I have to program to take me to a destination because driving there with my own intellect and physical ability does not make sense?
Younger generations who either delay or do not want to get a drivers license, and the older population who no longer has the ability to drive on their own and would welcome autonomy so they can go where they want on their own.
The Hippie generation swore off cars as well on the 1960s, but were the first to buy the BMWs in the 1980s. As far as the elderly, sorry. If I can’t drive my own car I will hire someone who can. If I am too old to drive chances are I will be too old to work my way around my destination without human assistance. I personally hope these avs blow up in Barra’s and GMs face and soon. Perhaps then GM can start building world-class vehicles like they used to.
Maybe the electric revolution really will happen as predicted above but, again: The decision to kill off entire models beforehand was not smart, and shows bean counters shouldn’t be allowed so much decision making. People don’t fit into math equations.
They could have retained more customers, instead of alienating them. Offer returning Impala, Cruze customers an electric version of the same model in a few years. Instead, these buyers will be forced to go to the competition in the interim, anyone’s guess if they will ever return when GM finally does come out with something unrecognizable to them.
I don’t think you’re seeing this from a business point of view. You could continue making ICE cars that have decent volume. But they have low/no margin due to the discounting, have negative mindshare and you plan on stop making at some point. Or you could start making low/no margin EVs that benefits you from a knowledge standpoint, market mindshare as well as future direction.
You’re right they might lose customer to other manufactures, but that other manufacture will have to make the same choice sooner or later. And guess what – who will be years into their plan versus just starting?
VW is jumping head first into the electric revolution, too, but I would bet money that instead of killing the Jetta, they will soon offer one with electric propulsion.
And why other brands survive selling cars in the same segments while GM thinks it cannot, is in part directly related to how much profit the respective higher ups think they need, the difference being the focus on money vs focus on the product.
I don’t trust Barra to run a hot dog stand let alone be a visionary for future transportation. Considering her company cannot even come up with vehicles that are not overpriced or vehicles with decent interiors, I am not holding my breath. This foray is right up there with the failed Saturn dream of Roger Smith’s
Not much different than 100 years ago. There was steam, electric and gasoline internal combustion engine and throw in diesel engines in trucks, especially Europe.
The latest energy reports we read is each household is using less energy, primarily through LED lighting and more efficient appliances. Coal fired plants are being taken out of service and dismantled. Solar cells are being added almost everywhere to supplement the power grid. As we build up a electric vehicle market, can the current power grid handle the additional load? Will electric rate demand new power generation and hike the prices? Before we know it, electric cars will be expensive to operate. Instead of any oil embargo, limited production by other countries to raise prices, who will hold us hostage on the supply of batteries? China is the world largest manufacture of lithium batteries and Chile has the world largest supply of lithium reserves. Well at least we can breathe better and the earth can start cooling off.
https://www.statista.com/statistics/268790/countries-with-the-largest-lithium-reserves-worldwide/
I just completed driving from Toronto to Los Angeles. In order to complete the drive I travelled approx 600 miles per day. Each day I had one stop for 5 days at approx noon to gas up, get a coffee and a sandwich and finish the days drive.
Question: will an electric driven vehicle be able to complete the same drive. Toronto to Los Angeles ( 5 driving days and 4 nights).
Btw: if GM wants to reduce the number of passenger vehicles then it would make sense to have two classes of vehicles ( Cadillac and other (merge Buick and Chevrolet)) versus dropping all the other vehicles. I do not know who is making the decisions. Are they talking to their customers?
Most people would just take a plane, and therefore cover the same distance in 6 hours instead of the better part of a week.
Long distance journeys by car (EV or ICE) aren’t terribly practical and wastes time and effort. It may be cheaper than buying a plane ticket, but if you can afford to throw away 120-130 hours traveling and putting 3000 miles of abuse on a car, then you might not need to evaluate how you travel.
I have done several 1000 miles driving / day trips in our Volt – Oh I forgot, they just discontinued it!!!!
The Volt concept makes a lot of sense to me. Why not extend that concept to larger passenger cars, SUVs, Pickups, etc.
A Toyota Prius has no trouble covering the Toronto to Los Angeles trip and achieving an average of 60 mpg and not have to be plugged in every night.
In our case, we did not have an option to fly and given the traffic volumes, we were not alone.
BTW: the drive is interesting and one gets to see other parts of the country that one can not experience at 35,000 feet in a plane.
Travelling I-40 ( parallels Route 66) at many points highlights what can happen when technology impacts the status quo.
I understand that change is a reality and will not go away
I don’t know if you’ve noticed but Prius sales have fallen dramatically over the past several years. I understand what everyone is saying. But regardless car sales are falling. Whether it’s the Civic, Camry or Corolla sales are falling. GM wasn’t the #1 seller in the best of times. Why continue when the market is shrinking? Money is best spent elsewhere where you might have a chance to put a stake in the ground.
I’m sure there will be an EV capable of doing that someday. But note that is an outside case. You could build EV’s for the other 80% where that isn’t a use case and sell millions.
The EV evolution (not revolution since EV cars is nothing new) is coming. The question will GM will be around to see it? Will Cadillac be around to see it?
“…selling 100,000 electric vehicles a year through 2025. That’d put the market at 700,000 EV sales in the U.S., ”
Do you mean “adding?”
I can’t imagine anyone getting in a car without steering and speed control, even if they’re not necessary. But today’s youth are nuts.
Where are Europe and China going to get all this electricity? They won’t go nuclear, and there isn’t enough land or sun for solar.
Good question.
The Nordic government has already decided that new ICE car sales will be forbidden as from 2025 and the French government has decided the same as from 2040. Several European cities have already forbidden entering the city center with older Diesel engines, and petrol will follow in the next years. In some cities this has led to an exodus of more wealthy people, and in some areas shops had to close due to reduced customer visits.
However, not a single politician has indicated where the extra electric power has to come from (nuclear energy has been banned previously in most of Europe too, leaving gas and coal as the sole options, next to some solar power). The heavy tax income on fuel the European governments were used to is rapidly being shifted to extra taxes on electricity and on distances traveled between 2 locations (which they monitor through the extensive use of cameras that recognize license plates – you then get a mobility tax invoice for the numbers of miles traveled per month).
In recent weeks all over Europe crowds have been demonstrating for more climate change measures, including banning cars from even more cities. It’s eco-extremism at its absolute zenith.
Today’s younger generation are doing what us baby boomers did starting in the nineteen sixties into the seventies. Leaded gas got outlaw and emissions controls on every fossil fuel burning entity were enacted and still going on. Emission controls on cars staved them and MPG barely move. Everyone hated the controls at that time. Because of emissions laws and computers, vehicles today are cleaner and more fuel efficient than ever. Our younger generation is trying to bring it to the next level and technology will eventually catch up.
You all need to stop reading Bots and big oil shrills. As early as next year it will be cheaper for utilities to build large solar and wind arrays than any other type of power plants. China is investing so heavily they are practically giving away EVs. Guess what happens when those Chinese solar and BEV car companies get scaled up and start dominating world markets? It will make their current manufacturing dominance seem like childs’ play. Our “wanna be dictators” trade war threat is laughable to them. Think about it.
The assumption there isn’t enough land for Solar and Wind is ridiculous. China has more than enough land to produce all of its electricity from Wind + Solar, as does the United States. I recall, that there is little to no population in the central region of the United States. Installing Energy Producing Plants, and sending that energy to Batteries scattered in cities throughout the Nation would be more reliable, than the power grid we have now. The United States has one of the LOWEST Capita/sq mi average on the face of the planet.
Driving towards Amarillo Texas from Albuquerque one encounters a major wind turbine farm ( in Texas – 100s of units and building more). So, Texas has already accepted clean energy as an option in a state where oil has been dominate for years.
We also observed car carriers full of Teslas heading east.
Went to a GM dealership in Los Angeles for an oil change. A comment was made to me that since the GM announcement to stop making the Volt, they experienced a projected loss of over 500 to 700 units of Volt sales and that is just one dealership.
There was an earlier comment that the bean counters are making the decisions. That is probably closer to the truth.
When it comes time to replace either my 2014 Malibu or my 2017 Impala I will be looking to non GM providers. SUVs currently do not provide the fuel mileage of my current vehicles ( I was achieving 35+ mpg in several segments of Toronto to Los Angeles and return drive with my 2017 Impala with the 2.5L engine). I am just one voice, but unless GM has a rabbit in the hat for fuel mileage ( and not one of the 1.4L Turbo offerings as they can not handle the highway speeds with a full load) my next purchase will be non-GM.
My next car will be Hybrid Electric, like our beloved Volt.
But probably not an American-made car and certainly not a Chevrolet.
I really don’t care *why* GM shut down the Volt, only the result- I will never buy another GM car again.
The bottom line is this. : the car companies that will thrive in the future will be the ones that offer the customer what they want. Barra’s butterflies, unicorns, and fairies vision may be cute to the environmentalists and Wall Street, but GM has proven time and time again that you cannot force people to buy vehicles that they do not want.
Regarding electricity, there are potential breakthroughs coming that would capture CO2 emissions before they leave the vehicle. This would revolutionize the ECE and perhaps ice the growth of EVs.
“there are potential breakthroughs coming that would capture CO2 emissions before they leave the vehicle.”
Proof? Post a link to this mystical CO2 capture device. It sounds about as believable as the 100mpg carb from 50 years ago.
Besides, even if it does exist, it’ll all be moot when ICE’s are outlawed. Nobody wants to keep sending money to OPEC if every nation on earth can generate their own electricity.
“there are potential breakthroughs coming that would capture CO2 emissions before they leave the vehicle.”
Not buying it. Even if true it would only help with part of the problem, and probably too late. We are drilling and fracking where we shouldn’t, transporting to where it can be refined, then transporting to all corners to be used. It’s a horrible system, with pollution, spills, fires, etc, environmental damage all along the way. We don’t have 20 years to screw around with token changes and misinformation with climate change barreling down on us. Transferring to renewables is a win, win; helping the environment and saving money. The economic boom should more than make up for any losses. Or blow it all off and buy everything from China later. I do mean everything.