General Motors outperformed all expectations in the first quarter of 2020, posting $300 million in income on $32.7 billion in revenue. The results were discussed during the recent GM Q1 2020 earnings call, during which GM CEO Mary Barra discussed a number of things – including the company’s commitment to future GM EVs.
During the call, Credit Suisse analyst Dan Levy asked Barra about upcoming GM EVs, noting that the current environment of low gas prices and relaxed emissions regulations could make the case for pulling back on electric vehicle investment. However, Barra’s response indicated that it’s full speed ahead when it comes to electric vehicles.
“Our commitment is unwavering,” Barra responded. “We think it’s the right path forward and we think with the Ultium battery platform that we have, the partnership we have with Honda, the strength we have from China where EVs and new energy vehicles are a key part of being successful in that market, positions us extremely well to have a leadership position in EVs with a full range of EV vehicles.”
Levy pressed the issue, asking Barra to reiterate that cheap gas and relaxed emissions standards wouldn’t change the investment strategy with regard to GM EVs. Barra responded by saying that the transition to an all-electric future would happen gradually, and that in the more immediate future, GM would “continue to focus on full-size SUVs and full-size pickup franchises,” while also making those products “more fuel efficient and emissions efficient as well.”
Check out a complete transcript of the exchange below.
GMC Hummer EV teaser
During the call, Barra also indicated that GM EVs like the Cadillac Lyriq crossover and GMC Hummer pickup were still on track, despite disruptions caused by the COVID-19 pandemic. The Cadillac Lyriq and Hummer EV will be the first two models in an onslaught of GM EVs tipped to include “at least” 20 all-new battery-electric models by the 2023 calendar year.
As covered earlier this year, executives expect the new GM EVs to be profitable right out of the gate, just as a standard gas-powered vehicle would be.
Dan Levy (Credit Suisse): “We’re obviously in an environment of really cheap gas, and regulations in U.S. have just been eased – and you are for the most part primarily exposed to the U.S. You could make the case that this would prolong the EV uptake and that you could actually put the brakes on EV investment temporarily. Is the rationale for maintaining EV investment right now that this is your future and there’s just no compromise on that vision, even with these unprecedented circumstances?
Barra: Dan, I think you said it well. Our commitment is unwavering. We think it’s the right path forward and we think with the Ultium battery platform that we have, the partnership we have with Honda, the strength we have from China where EVs and new energy vehicles are a key part are a key part of being successful in that market, positions us extremely well to have a leadership position in EVs with a full range of EV vehicles. So we are looking at every possible angle to continue to accelerate our EV and our all-EV future.
Levy: And cheap gas and relaxed emissions isn’t going to change that, correct?
Barra: Well, again we believe this transformation will happen over a period of time, and while we focus on EVs, we will also continue to focus on full-size SUVs and full-size pickup franchises that we have, and we continue to make all of those products more fuel efficient and emissions efficient as well, so I think it helps in supporting our franchises even when you have a low gas price. From a regulatory perspective, we’re being driven by what we think is the right thing for the future and where the opportunity will be to get there and be among the leaders.
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Comments
As they should, always be prepared in calm waters. E/V will be half the vehicle market by decades end.
Cheaper gas does not reduce the other half of TCO: maintenance. An EV need absolutely no maintenance at all! The brake pads can last decades since most reduction is done under regeneration. The coolant for the battery and controller never reaches high temperature so it can also last decades. The only parts that will need replacements are tires (Michelin is working on that), wiper blades (depends on weather), and cabin air filter.
As a finally “savings” issue, EVs need no trips to “refuel”. You can recharge at home while you sleep.
How long do you think low gas prices will last? I wouldn’t make a big purchase betting that gas prices will stay low.
Some people have brake pads that rust off from no use and that also depends where your at and such things as garging,…so there is a little more maintenance than you portray.
EVs do use their brakes but only at low speeds when the regenerative force is weak. They do keep their rotors rust free during normal driving. As a fact, I have a 2014 Fusion Hybrid, and in five years the pads still look new and the rotors are clean.
“An EV needs absolutely no maintenance at all!” That is not true at all!
Only body and tires. Nothing else for at lease 80,000 miles or ten years. Search and read the 2019 Chevy Bolt Owner Manual for the maintenance schedule. And as proof, I have a 2014 Ford Fusion Hybrid, and after five years the only part replaced is the oil filter because the maintenance schedule required it since I do use the gas engine but only for 20% of the time a regular gas engine car does.
Hopefully Cadillac’s upcoming EV vehicles will have nicer interiors than what’s on offer in their current vehicles.
Future Cadillac EV’s in my humble opinion not only need better interior quality but they need ALL the Lastest and Greatest Tech on offer. They cannot leave a Tech stone upturned so to speak. That is going to be the appeal early on for Luxury buyers.
They’ve got to be beautiful too, today’s’ Cadillac’s are not beautiful vehicles… they’re not classy… why not “gotta have” styling….? The Lysol does not look beautiful it looks generic and that won’t sell…
Mary May change her mind when nobody buys them!
Only an idiot thinks gas prices are going to stay low. We currently drive a Volt and are watching the new battery technology with great interest. Folks who haven’t driven an electric car need to take a test drive instead of telling js how no one will buy an EV.
Harsh but actually I think the more of us who buy EVs will keep gas prices in check short of taxes increased potentially per gallon….and is why the Oil and fossil fuel companies cringe at EVs taking shape.
Wow already to the name calling! What people don’t realize is when gas goes up so do electricity rates considering almost all electric power comes from natural gas. Gotten mostly through fracking. Only 2 percent of our grid is wind and solar and is no where close to where it’s needed. Also EV pushers seem to think charging your car is free. Try running a 1500 watt space heater for 10 hours and see what it does to your bill! And in Mn. Where I’m from you range will be cut in half in the winter months. And won’t even run at 20 below zero! Even Michael Moore just figured out EVs are not all there cracked up to be! One more thing the Chevy Bolt has been on the market since 2016 and hasn’t sold more than 20 thousand vehicles in a year. Total money looser!
Then buy yourself a Ford Hybrid instead of a full EV. In the summer you run on electricity only, and in the winter you run some gasoline. Or move south to avoid winter completely. I was from New York and I moved south in 1962. I will never return! Move away from Minnesota!
No, don’t move south. Please.
You’d lose the seasons and the peaceful snowy nights. In the south, the summers are way too hot and there are bugs. Stay in New York or Minnesota and all that is avoided. Southerners often don’t wear shoes and many can’t even read and write yet. A little cold is better than such an uncivilized society.
Sorry, I did move even southern than Florida. I mover to Puerto Rico, where it is a tropical paradise, it is warm all year round,and we pay no Federal taxes. I don’t care about autumn or winter. But we have limited EVs here on sale, and there are Tesla but no service station, so I will only buy a Ford or a GM EV. My wife want the Cadillac EV so I have to start saving at least $1,000 a month now to pay for it by 2022.
Yes, we’re all backwards uneducated rednecks. You wouldn’t like it here, nor would we appreciate your company, please stay out.
-Big scary redneck
A southerner that can use technology?…
I’ve already said this but in the early 80’s GM embarked on Round 2 of downsizing their fleet and converting them all to fuel efficient, cheaper-to-build FWD, unibody platforms.
The company had been wildly successful with Round 1 which ushered in trimmer cars in all categories but largely kept traditional body-on-frame designs with V-8s, albeit smaller in displacement, and RWD.
Buoyed by that success and believing fuel prices would skyrocket in the 1980’s, GM launched an even more ambitious plan for their second wave. Everything except Corvette would move to a transeverse-mounted engine and FWD with large cars moving to six cylinders and for the first time in 50 years, four cylinder power plants taking a big role in the power train lineup. On the way to this future, presidential leadership changed, fuel prices plunged, environmental and fuel efficiency regulations were modified but GM, undeterred marched on.
As the cars came to market, they were so different in appearance and scale that buyers resisted them. They were so different in how they were made and engineered that they were plagued with mechanical issues. They were the beginning of GM’s great downfall. Once popular cash cow cars like the luxurious Buick Riviera saw sales decline by 60 percent or more after their recreation. Cadillac was hit particularly hard as buyers had difficulty adjusting to a Sedan de Ville that had lost so much of its road presence and style. Cadillac has never again matched the sales success they had prior to the FWD conversion, nor has Buick.
After many of the products were met with such resistance by buyers, GM hastily added length back to them and kept old designs like the RWD Cutlass Supreme and what became the Cadillac Brougham in production long past their intended end date. Despite these stop-gap efforts, the damage was done. Loyal GM customers went elsewhere and many never came back.
In my opinion, the once mighty GM stumbled badly with this ambitious plan and they simply never recovered from it. The plan was too aggressive, too inclusive, and too dramatic. Even those who wanted smaller cars found GM’s offerings to be unreliable because there was so much that was new and untested about them. GM executives later admitted they’d redesigned their fleet for a future that never came.
I’m not pro-electric or anti-electric but if I were sitting in Mary Barra’s chair, I’d have George Santayana‘s words posted in front of me: ‘Those who do not learn history are doomed to repeat it. ‘. They’d never be too far from my mind. GM forged ahead once before even after they knew the future they’d envisioned had shifted dramatically. That intransigence did great harm to the once great GM. Might this similar undeterred push for an all-electric future turn out the same. My approach would be decidedly more mailable. There would be some Cadillac electrics on the horizon but like their German competition, all the eggs wouldn’t be in that basket. Especially when the public really hasn’t embraced GM’s Bolt, Volt, ELR, or even the hybrids. That reality should serve as a giant “Caution” sign for the triple zero future Mary is betting the company on. Those sales figures plus the lesson from history should be cause for trepidation.
GM had better build an ev that is as good as Tesla . Tesla is like Apple , they got it right from the beginning. An apple tablet from 2010 is still a great product today just as a 2012 model S is. Maintenance will be minimal on an ev for sure, but with extended oil changes from 10-15k on many new ice cars you really have just oil, air filters cabin filters & brake pads to deal with for the first 100k. And the people who own EVs that are bragging that they pay no road taxes cause they’re not buying gasoline , beware. Twenty six states are imposing ev fees. Eleven are charging more than a gasoline car would pay and three are charging more than double according to consumer reports. So GM should be careful about rushing in too quickly. And finally, Barra is an awful CEO who needs to retire and be replaced by a competent person who will make the right decisions and not just recite what they think the stockholders want to hear.
No doubt Mary Barra will leave with a multi million dollar payout, leaving GM a shadow of its former self left with just North America and dodgy China operations
Soon GM and Tesla will be going head to head on EVs. I expect GM will better Tesla.
My opinion is the following. If the Board is allowing Barra to spend this amount of Capital on EV’s, which I am in agreement with by the way, she will stay for at least the next five years to see the plan through.
I still do not understand why some here are upset or have yet to figure out that besides here in the USA, EV’s will be the majority of new vehicles being sold around the World in the next 10/15 years.
If you are truly a GM fan, why is their EV plans upsetting you?
Do you want GM to be around for the next 100 years or do you just want them to make something you are currently used too?
Things always change.
I could not have stated it better myself and you hit the nail right on the head. Sometimes companies can get too far ahead for their own good (remember laser discs and beta?).
Chrysler almost made a similar mistake in the early 1980s. All of their vehicles were to be front-wheel-drive. There was even a K-Car pickup that was developed. Needless to say, what remains of Chrysler would have been gone a ling time ago.
While GM is putting much into the EV program the ICE is still going to be around.
As for gas prices they are up down and al, around so they are a non factor. The key here is to build a vehicle that people will want to but no matter what’s it runs on.
Emissions are going to be a problem from election to election and state to state.
As it is now Cadillac is not setting the world on fire so What have they to lose here?
While GM has made tons of mistakes in the past they also got a good many more things right,
I am not a rabid EV fan but I am open minded to the. So far GM appears to have the technical size sorted out well and look to be well on their way to make batteries better and much cheaper than most. The key will be to market them right and build them right.
For too long G! Tried to put the cart before the hose like the entire industry buy trying to make a $30k EV that makes. No money. Today by going large like the Hummer and Cadillac it will reduce development cost faster. This was the one major contribution Musk had was to prove people will pay a lot of money for a luxury EV.
Also if GM can prove their tech they can license it to more than Honda and make more money on cars others build.
The other factor is this may be their way back into markets they left. Europe is struggling with many requirements for EV models but few to choose from. Same in other markets.
While EV models are not for everyone GM should do well and make money here. In time 5hey can expand the technology to cheaper models. ICE will remain in the models needed as their will still be a market for the. It is like shoes not everyone wants Nike’s. I wore my ASICS wen they weren’t cool and I am still happy with them.
I was in the market for a new car, as a gm fan I looked long and hard at the gm range but just nothing of any appeal, in the end I took the plunge and got a Tesla model 3. The fact it’s a ev is a side issue, it’s just all round amazing, and this is the type of excitement gm needs to be building not tomorrow but now.
@Simon
I totally agree with you. Nothing for the money comes even close to the Model 3
I am getting a Model 3 as well but I am hopeful but highly unlikely that Tesla will be leasing the Model Y by the time I will need to replace my lease. I then am hopeful that the Cadillac Lyriq will be much better than the Model Y and I can come back to the GM Family.
The Chevy Volt was a $45,000.00 when it came to market which was pretty hard to sell when its parked next to a new Corvette that’s $55,000.00. Which means the biggest mistake made was not building it as a CADILLAC to complete with Tesla in the 1st place, you can’t be the “Standard of the World” when your afraid to face it
anything less than a full-throated response from barra would’ve been an admission of a failed strategy.
i hope it all works out but it seems like a long road to get from here to there.
any ICE car you buy today should be more or less trouble free for 100K miles.
and if you are concerned with efficiency, you can get a hybridized version for an extra $2K or 3K.
i don’t think an EV can compete with that right now considering the stiff price premium you pay up front.
Worry free for 100,000 ICE miles? Have you seen the Class Action lawsuits just our beloved GM is facing for Warranty issues let alone the rest of the Legacy Auto Makers.
I like Cadillac to be an EV tech brand leaving Buick to offer classic luxury gas driven cars.
Was that the same unwavering commitment we have seen them have for Cadillac the past decade which has produced greater turds every year?
General Motors CEO Mary Barra is part of the Me Too crowd and will do whatever it takes to be part of the Liberal philosophy even if there might not be a market for these products.. will anyone pay $150-200,000 for a Cadillac EV; if buyers aren’t willing to pay $35K for a hybrid or small EV, it is extremely unlikely that anyone will pay over six figures for an electric.
@omegatalon
Are you saying that Customers do not want EV’s in general or that they know that Tesla is miles ahead from anything else on the Market and just chose the Tesla?
A Chevy Bolt cannot in any way shape or form compete with a Model 3
Lets hope the Cadillac ones will though. EV tech changes rapidly so lets see what GM has in store for us.
I cannot wait.
My neighbor owns a Tesla. When it broke down a few months ago he had to tow it 100 klms to the nearest Tesla dealer, as the city i live in (over 100,000 people) has no Tesla dealer to fix it.
With big car companies (gm) having dealers in smaller cities, unlike Tesla, the lack of a local dealer to perform repairs problem is gone.
That is one reason I cannot buy any Tesla cars because we have no Tesla service here. I live in Puerto Rico and we have many GM and Ford dealers, so I can get my cars in one in less than half hour. I do my own repair, too. But Tesla will not continue their warranty if I do any repair on a Tesla car.
Tesla doesn’t have as many Service areas as Legacy Auto makers have dealerships but lets also remember Tesla cannot sell their vehicles in many, many States around the USA. So we cannot compare a Tiny Company the size of Tesla to say GM and Ford. I have always said that a Tesla is not for everyone for many reasons. That is why I am excited that VW and GM are All In on the EV front. Tesla will finally get Competition which in turn will make everything better for us the Consumers.