A number of automotive industry analysts believe General Motors may risk losing market share as it forgoes introducing new or updated models in favor of investing in its future electric vehicle programs.
GM plans to invest $20 billion in electric and autonomous vehicle programs between now and 2025 – making it one of the biggest backers of electric vehicle technology in the entire industry. Moving so much cash to one area will have an impact on the rest of its model portfolio, however. According to The Detroit News, GM is only planning to replace 65% of its current lineup with a new or updated model in the coming years, with much of its resources dedicated to new EV programs like the Cadillac Lyriq and GMC Hummer EV.
GMC Hummer EV teaser
Speaking to The Detroit News on a conference call this week, Bank of America Global Research Analyst John Murphy said this strategy is emblematic of GM’s dedication to EVs, but may hurt it in the short term as competitors introduce more-up-to-date internal combustion engine vehicles.
“The very active shift General Motors is making shows the confidence that they have to move where the market is going,” Murphy said. “It may result in lost market share.”
Sam Abuelsamid, an analyst at Detroit-based firm Guidehouse Insights, echoed Murphy’s sentiments when speaking to The Detroit Free Press this week. He said one area where GM may lag behind reivals is with regard to hybrid crossovers. GM has said it will not invest in new hybrid products as it only sees them as a temporary stop-gap to EVs, but hybrids are among some automakers’ best-selling crossovers.
“General Motors has put a lot of resources into electric powertrains and vehicles that use those,” he explained. “That means they’ve taken away some of the resources from traditional products.”
The best-selling Toyota hybrid vehicle in the U.S. is the RAV4 Hybrid crossover, Abuelsamid pointed out.
“So there’s a lot of electrification going on in the crossover area that GM is not pursuing.”
This strategy may result in short-term market share losses, but will set GM up well further into the future, analysts believe. GM can benefit from the heavy profit margins offered by popular products like the Chevrolet Suburban and Silverado while developing its new EVs and will then have a robust portfolio of EVs when the technology becomes more popular further down the road.
“GM will be in a good position where others would not,” Murphy said. “It’s a concerted decision … and probably a good one.”
Subscribe to GM Authority to stay up on General Motors electric vehicle news and around-the-clock General Motors news coverage.
Comments
Losing market share isn’t a concern of General Motors CEO Mary Barra as she has taken the company into a death spiral with the mistakes she has repeatedly made especially with the Cadillac division as this news would fit right in.. the only possibility to change it would be what the unit price of EV cars like the Lyriq given something similar in Tesla’s Model X which sells currently for $80K.
Wouldn’t the Lyriq be a Model Y competitor?
Cadillac said it will be XT5 sized
If they don’t ever bring any of this crap to market, it doesn’t really matter what it theoretically competes against.
Chasing market share is what got GM into trouble in the 1990’s and early 2000’s. GM needs to continue to focus on being a healthy company and having a long term plan.
GM is at the casino putting 20 billion on red!
GM’s only hope is to end the fracking revolution. They’ve made a bad bet. If oil prices climb and stay high again, the economy will slow and all car sales will drop.
Their best (and least expensive) hedge would be to redo the interiors of existing cars to a much higher level. Instead, they’ll offer bigger discounts on all those ugly black dashes.
It’s so hard to predict when a large majority of the market will be open and fully willing to accept EVs. I believe Mary Barra recently stated it will take at least 20 years (until 2040) for a majority of the market. And since nearly every automaker is developing EVs, being a front runner isn’t going to be the easiest feat either, your vehicles need to stand out. I feel as though now is the time for manufacturers like GM to utilize the shift to change the public mindset, kind of like Tesla has done by providing a new experience in the cabin with never before seen technology, and the sportier driving experience. If you can lure in people to test drive new EVs simply because of their performance, design, and technology (rather than just bc they’re EVs) they will appeal to a wider audience and hopefully convert many skeptics to the EV mindset. Consumers usually don’t enjoy having products shoved down their throat, so for now automakers really need to bring their A Game to change people’s perceptions. Models like the Lyric and Hummer will help GM by breaking out of the norm, but it has a long road ahead and probably should not forget to keep enough vehicles available with ICE powertrains until it is obvious that the market is ready to forget about gas propulsion systems.
GM may lose market share? That headlines like 5 years to late, sales of GM are plummeting worldwide, it used to be number 1 in the world, now look at it. It not to do with ice or ev vehicles, it’s all down to pathetic management. People like to criticise Tesla but just look at the share prices of two companies.
Mad Mary needs to resign today
And how did being ranked #1 in the world help GM? Sure hasn’t helped VW Group any.
Sorry my mistake, I guess Mary Barra is a genius after all and market leaders like apple, coca cola, Nike, McDonald’s, Toyota who believe in increased sales are all run by idiots
And which one went BK while #1?, I’ll wait…
Besides it isn’t like Toyota, Ford, etc is overtaken GM in sales in the US.
Well when general motors actually manage the company well and did everything well general motors accounted for slightly more than1% of the United States’ gross domestic product. So financially being the biggest was beneficial to the bottom line. Unfortunately, general motors no longer has management that understands that; instead they have Wall Street short-term mindset.
Now look at GM with the Hummer Ev coming to market, all sold too! But the careful path should be appealing to the gear heads like Dodge, while simultaneously appealing to voltage heads.. GM can chew and play ball so bringing EVs to mainstream takes a lot of marketing, racing circuits, shows, they cannot rest on their laurels…..if they completely shut down cars, it may be their undoing…..except if Gas prices soar, and jobs being tied to petroleum, you just alienate the big SUV buyers, while forcing people into expensive EVs, good luck trying to wait out the used car market and inventory!
Nothing new. GM’s dream is a 10% market share.
Malibu is the next.
It’s an impossible position to be in. If say biden won, then fuel standards are going way up. Add in they win the senate and keep house, could be big push for electrification. If trump wins, oil is cheap and they could still sell a ton of electric caddy’s. Alot is out of control of gms hands. Also, the only electric car maker is the #1 valued car maker in the world….
I don’t think it matters one bit who wins the presidency. GM has always done a spectacular job of disappointing us, and that’s a good estimate of what they will do next.
I suggest a name change to SM.
“Struggling Motors”.
If you could charge your EV car at virtually any gas station within 10 minutes, and your car has a range of 300 plus miles, then I could imagine that there would be little consequence in ignoring future internal combustion engine vehicles.
Sadly that’s not the case. And I don’t think it will be the case in at least the next five years.
Can you imagine a scenario where a company like Hyundai makes a bid to buy GM?
How about SGM? already have the trademark and art. (Yes America, there really IS an SGM affiliated with GM)
Real EV owners don’t need to visit any charging station. They buy the range they really need, and charge overnight at home while they sleep. Some charge for free. If you need more range or cannot charge overnight, buy a hybrid. Charging at a station is just as bad but not as evil as buying gasoline. Gasoline consumption will drop and the Earth will be cleaner. BTW, I am a real “tree hugger” having planted several trees myself, and driving a 2014 Ford Fusion Hybrid, getting 54 MPG. I am waiting for the next EV that fulfills my needs t go fully electric. I do my part in saving the planet. Do you?
Several times a week actually. I’ve also been known to drive nearly 1200 miles in a day.
You’re correct in that EV owners charge at home and don’t travel far very often.
That’s also why everyone else isn’t buying EVs. For the EV market to expand, it’s going to have to be more practical for more people.
are you an uber/lyft driver? how often do you drive 300 miles in one day?
It’s hard for big companies to keep shareholders happy and be innovative at the same time. But playing it safe is not always the best strategy. Notice how Tesla and Amazon make big bets, take their lumps for bad quarters and then proceed to go astronomical.
Now putting most of the ICE lineup on life support (except Corvette and big SUVs) before even launching their EV replacements is not what I’d call a big bet. Instead, I’d call that a Hail Mary (yes, pun intended).
Question needs to be asked. Mary Bara in a room with 20 other people – mostly toxic car men. What business person in their right mind would say – I choose Bara to lead this company. Hence where GM is in now.
This same scenario exists in the Federal government. Oil barons give campaign finds for Congresspersons, and even some Presidents. Will they sponsor EV benefits, drop oil subsidies, and lose their campaign funds? Not at all!
Both Tesla and Ford are going all electric, or adding more hybrids versions to their main sellers as Ford is doing. GM has to do the same but is lagging behind. The EV Hummer and Cadillac Lyriq are too expensive for the common car owner who want to benefit from electric driving , but only the imports are offering cheaper alternatives. So if the top three domestic brand don’t drop prices or offer better EVs, they will lose the mass market to the imports and eventually lose all EV markets, except the wealthy.
What about the Bolt? Don’t own one, but I’ve driven it and liked it.
The “average” person is looking for a decent car, that fills their needs and won’t break the bank. At the present time electric vehicles do not meet these needs. The two top issues that are holding down EV sales appears to be PRICE and convenience to recharge. Once these are overcome, then there is hope for EV.
I still hold the opinion that in no more than 10 years it will make almost Zero sense for any Auto Maker to spend on R&D for ICE Technology to keep them on the road.
Why would a consumer chose lets say a 3 Cylinder Buick Encore when they can get the same sized EV that will blow it out of the water in performance?
China and Europe have already spoken and EV’s are the Future. Auto Makers cannot keep spending on two completely different ways of producing Vehicles.
The reason you’d choose an ICE is refueling almost anywhere in minimal time, while saving thousands on the purchase price.
I don’t expect oil as an energy source for vehicles to disappear for at least 30 years.
I think GM is pursuing EVs with a vengeance because they’re the ultimate is parts sharing. The batteries can be the same for a Chevy CUV or a Cadillac Cellistiq. The electric motors are the same. The platform is stretched up or down but the same. This is how GM likes to do things; all commonality under the skin with different window-dressing up top.
Building a real luxury car is hard. Taking a Tahoe and making it a Cadillac is easy money. Expect GM to significantly pare down the mechanical differences between vehicles in an EV era. A Chevy Silverado could use the same parts as a Buick Enclave.
Trouble is they’ve bet the farm on this cheap-to-build pipe dream and it may not work. So far, the public hasn’t embraced EVs en masse and with much more user flexibility for ICEs and cheap plentiful gas in the US, EVs may never be more than a niche.
“Trouble is they’ve bet the farm on this cheap-to-build pipe dream and it may not work. So far, the public hasn’t embraced EVs en masse and with much more user flexibility for ICEs and cheap plentiful gas in the US, EVs may never be more than a niche.”
I agree with you 100%.
That’s why they need to continue to find ways to make internal combustion engine powered cars interesting.
All big time American companies do Eventually fail, the few that remain is because they had to reinvent themselves. RCA, gone, too late into the VHS, CD markets though they did have a 12 inch disk no one wanted. Kodak, almost gone, too late into digital video and photography. Sears, almost gone, was the Amazon of the Twenty Century, has fail to reinvent itself. National Cash Register, NCR, was the biggest but almost went out. Dropped all point if sales devices except the self check out machines, now number one in that market. You can go on forever. But who to blame, the consumer who believed that the “foreign brands” make a better vehicle that many learn it’s not true. Ex. My son had a Honda Ridgeline And around 90,000 miles it started to come apart. Spent a few thousand to buy some time before buying leasing a Volvo.
If the peeps are stupid enough to elect dimentia Joe Biden GMary wins. If Trump pulls it out GMary loses. Simple as that for now.
This move has nothing to do with the environment. It’s all a political agenda. These elitist that Barra is a puppet to, do more damage to the environment then anyone else. Besides, they already have zero measurable emissions from ICE and, have for years. When was the last time we had a smog alert anywhere in the country? Cars are, and will continue to be priced out of a lot of the masses range.
You must have missed all of the pictures taken during the lock downs during the Covid-19 outbreak with how clear the skys were. People were able to see things they haven’t seen for years, if ever.
theflew No different that I have seen or anyone including the news has brought up.