The auto industry is in something of a tussle with itself. While the future in the eyes of major companies is electric, costs remain high that make it hard to squeeze any sort of profit from electric cars. In the near future, GM President Mark Reuss said that will change.
Speaking at the UBS Global Industrials and Transportation Conference, Reuss said GM has plans for everyman electric vehicles, according to a Fortune report on Wednesday. Specifically, he said these electric cars will sell at “very average transaction prices.”
The comment somewhat flies in the face of what GM has touted as its latest EV strategy. Cadillac will lead the charge into electrification moving forward as the automaker shifts away from pedestrian brands like Chevrolet selling electric cars first. Luxury brands are able to swallow more costs involved in electric car production than a bread-and-butter brand like Chevy. Yet, Reuss underscored the automaker won’t need to rely on luxury prices to make money and sell affordable electric cars.
GM still loses money on every Bolt EV it sells, for example. A future Cadillac electric SUV, however, could turn a profit. GM has also said its future BEV3 electric platform is the key to building profitable electric vehicles.
The key is to reach cost parity with traditional internal-combustion-engine-powered vehicles. Right now, the industry isn’t there and some forecasts peg late next decade as the timeframe. Reuss said it will happen sooner than many believe.
“We’re driving down the cost of batteries and the whole EV in general,” he said.
Reuss also pointed out the cost of building electric cars is coming down, while the cost of manufacturing a vehicle with a traditional engine is, actually, increasing. Automakers need to cram more technology and emissions-saving systems into a traditional vehicle, which increases complexity. Complexity, more often than not, affects the price.