General Motors proclaimed it has 20 new electric cars in the pipeline by 2023 last year, and China will play a pivotal role in the automaker’s success as it embraces electric powertrains, or “propulsion methods,” as GM likes to call it.
Bloomberg highlighted how important China will be to General Motors as the automaker moves to navigate an upheaval in the industry in a Wednesday report and it hinges on electric cars.
If GM is going to hold true to its belief in an “all-electric future,” per product chief Mark Reuss, China will be the epicenter. The United States hasn’t rallied around electric cars, and to be frank, there’s hardly an incentive to make the switch. Fuel prices remain low; charging infrastructure remains sparse across the country; and customers can’t get enough SUVs and pickup trucks.
Despite the market realities, GM is betting big on being an early adopter. The automaker could easily begin shipping over electric cars from China should the U.S. market have an about-face and begin to shun the internal-combustion engine, but plenty of hurdles remain.
For example, the Chevrolet Bolt EV uses more aluminum and copper than a traditional car and far less steel. The two materials will only cost more next year amid the U.S.-initiated trade war. Further, GM will need to address the value found in electric cars. Last year, the report claimed GM lost $7,000 on every Bolt EV sold, even though it’s roughly $9,000 more expensive than a traditional gasoline-powered car. Experts believe it will still take at least six years before an electric car’s most expensive component—the battery pack—reaches cost parity with internal combustion engines.
Add in the fact GM will soon lose its federal tax credit for electric-car purchases, and things look dicey in the U.S.
In China, GM continues to ride the wave of government subsidies and regulations that will require automakers to sell a certain number of electric cars and meet a quota. Unlike other markets, sales of GM’s electric cars have increased in China, although the market is down sharply this past year.
With GM out of many major auto markets such as India and Europe, the future hinges on one country: China. That is, until North Americans buy into the automaker’s envisioned future.