GM EV Production Targets Challenged By Battery Supply, Says Analyst55
General Motors aims to be the North American EV market leader by mid-decade, announcing early last year that it expects to reach a capacity of 1 million EV units in North America by the end of 2025. However, according to a recent analysis, GM’s 1-million-unit goal may be hampered by limited supplies of batteries and a slow production ramp-up at its new U.S. battery plants.
Per a report from Reuters, the forecast and analysis was prepared by the Pennsylvania-based industry research and analytics firm AutoForecast Solutions (AFS).
AFS predicts that GM will be limited to roughly 600,000 EV units in North America by the 2025 timeframe, with predictions based on GM’s planned battery production at new battery plants in Ohio, Tennessee, and Michigan.
GM has partnered with South Korean battery maker LG Energy Solution to form the Ultium Cells LLC joint venture. Ultium Cells mass-produces batteries for use in GM’s range of all-electric vehicles, with three new battery plants on the docket. The first, located in Warren, Ohio, is already operational, while the second, located in Spring Hill, Tennessee, is set to begin operation in early 2024. The third, located in Lansing, Michigan, will begin operation in early 2025. GM estimates that the combination of all three facilities will provide a combined annual batter production capacity of 135 gigawatt-hours (GWh), or roughly enough capacity to power 1.35 million EVs.
However, due to the staggered production start schedules and a slow ramp-up to full capacity, AFS predicts that the three facilities will in fact have roughly 58 GWh of cell capacity, or roughly equivalent to 550,000 EVs. Further limitations may be realized due to an insufficient supply of raw materials required to produce the batteries.
GM recently announced that it will build a fourth battery production facility in the U.S. with Samsung SDI following cancellation of plans to build the plant with LG Energy Solution.
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Absolutely no surprise here. Watching the inevitable slide into non relevancy, if not bankruptcy. And I don’t say that with any glee. Almost completely run out of the China market, relegated to becoming a niche player at best. Company saddled with debt, compared to Tesla having 22 billion in the bank and no debt. Late to market with underwhelming products. How many Hummers did you sell last quarter? Lyriqs? Battery supply constrained with Tesla producing twenty times more production on a quarter to quarter comparative basis based on Q1 23. And they are built and prepped to scale massively, with Tesla Mexico and other death star manufacturing hubs in the pipeline. Dealer inventories piling up on lots. And the Ultium fiasco? When you place your eggs in one basket with LG Chem, this is what you reap. It is not going to be pretty.
Unfortunately, you are 100% correct, everyone should check out the Munro tear down of the ~3000 pound HUMMER EV battery pack. They are even further behind than I thought. I’ve said it numerous times on this forum that Ultium/LG Chem is a disaster and GM should just swallow their pride and go with 2170 or 4680 cells. Even the dumpster fire known as Ford is making solid moves with LFP batteries that gives them a fighting chance to stave of bankruptcy. Keep in mind GM uses 3rd party cylindrical cells in China, not Ultium packs. Packs cannot be scaled nearly as well as prismatic cells and are not even close to being cost efficient. All legacy OEMs have over promised and under delivered, but GM has been the boldest.
Munro is trying to compare the battery case of a Tesla/Lucid that can be damaged by a rock on the road to a battery case capable of rock crawling and is a structural member of the vehicle. This is an apples-to-oranges comparison where they don’t account for vehicle use.
You might have been watching a different video, because in no way do you accurately reflect either what the two engineers who led the teardown actually said or concluded. Their analysis was unbiased, and an objective look at what they found after tearing the battery down. To summarize, the GM Ultium battery is highly inefficient (many observations about the poor quality construction), poorly designed, poorly engineered, and heavy as fX#! (use of steel vs. aluminum). Thousands of welds and unnecessary parts. (the best part is no part). Their analysis was based upon their understanding of industry best practices in battery construction. Munro’s credibility as an engineering firm that does lean teardowns for clients in multiple industries to recommend leaner manufacturing process improvements is respected. GM’s battery is a mess.
Unbiased? Sandy Munro is as unbiased as Consumer Reports. He gets paid by other automakers to trash GM products.
I think that you view him as biased because you don’t like the message. He’s a former legacy auto engineer (Ford) and insider with almost 50 years in the business. He knows where the bodies are buried and he isn’t afraid to call BS when he sees it. Whether you wish to acknowledge it or not, and its not just Sandy saying it (Toyota called Tesla’s battery designs and engineering excellence “works of art”) which is high praise indeed, it is what it is. It’s an inferior product that misses the mark on many levels when compared to industry best practices. There are far too many voices apart from Sandy saying the same thing.
Mary wrong, again.
So let me get this straight. A third party analysis was done to see where GM would be with cell production in 2025? Why not just ask GM? They are the ones that will have to answer to share holders if they miss their targets.
Probably because they have made bold promises each quarter that aren’t even close to reality and NONE have come to fruition. I could paste the numerous predictions since 2017, but that would take up pages, but to name a few: ‘GM will offer 20 BEVs by 2023 / 30 by 2025 when they surpass Tesla in sales’ or ‘be the first automaker to be profitable selling BEVs’. That’s likely why they utilized a third party.
GM has announced over 3/4th of those 20 vehicles already, you’re just not keeping count. I think they are at 15 at this point off the top of my head not counting anything in China. Bolt EV, Bolt EUV, Hummer SUT, Hummer SUV, Silverado EV, Sierra EV, Lyriq, Celestiq, Escalade IQ, Bright Drop 400, Bring Drop 600, Equinox EV, Blazer EV, Sierra EV, and Cruise Origin.
Some of those you counted twice! And is variant of a model really a separate model? And the Bolt is dead FYI.
Your counting mythical cars not even in production yet “Silverado EV, Sierra EV, Celestiq, Escalade IQ, Equinox EV, Blazer EV, Sierra EV. and double counting, plus the Bolt is not a NEW release.
There was a savant who commented somewhere why is there no shortage of cell phone batteries?
Oh well, that basket full of GM eggs is slipping.
GM should have stood up to the government and defended their customers’ preferences instead of rolling over into an all-EV oblivion. Now they have burned through tons of cash for a new product line that few of their customers want, screwed. Bud Light anyone?
Did GM stop selling ICE vehicles yesterday that I’m currently not aware of? Last time I checked they have a line-up of ICE vehicles with more in the pipeline in the coming years.
If you don’t like the EV Silverado, Sierra, Escalade, Blazer, Equinox, Bolt EUV or Lyriq buy the ICE Silverado, Sierra, Escalade, Blazer, Equinox, Trax, or XT5.
The only EVs GM sells that don’t have ICE equivalents are the Bolt EV and Hummer SUT/SUV EVs.
If that was their intention, why did they come out with guns blazing to say they would kill ICE by 2035? Even if that was your plan in the end, why piss everyone off now over a pie in the sky goal that might never happen?
In a woke attempt to raise ESG scores. GM will be flying the pride flag in June for that reason too, unfortunately.
GM has stated many times that they begin phasing out ICE vehicles in 2024 and will stop producing ICE vehicles and produce only EV’s by 2035.
What’s your point? They are no longer making the Impala, Sonic, etc. But people make it sound like GM only sells EVs RIGHT NOW and that’s far from the truth. I’ll worry about buying an ICE vehicle in 2035 in 12 years, not today. There are a lot of things available today that will not be around in 12 years.
Unfortunately gm and Ford are woke social organizations that happen to build vehicles. Need to go back to the 50s mantra: What’s good for GM is good for America.
If I was a GM investor now I would be selling the stock ASAP. GM has got to have the same information / projections as AFS and yet they continue with the rosy projections of over 1M EVs in 2025. Missing this projection by a large amount renders the associated financial projections useless (unless GM is actually expecting to lose $ on each EV in which case a lower number of EVs could be positive news). Either way, this kind of uncertainty is what drives investors away. I agree with Dave Roberts, GM is in trouble.
There is no way that GM is going to deliver 1M EVs in 2025. It’s a pipe dream that Mary is selling to fluff the stock price. Their 1Q 23 production numbers are proof of that. Ford reported sales of 10,866 EVs in the first three months of the year, while General Motors reported 20,670 in the same period. Tesla? 422, 875.
I think that you’re missing the larger picture. The move to an EV future isn’t some kind of government mandate. It’s what the market is asking for. Consumers hate dealer/ stealerships. They want to buy them direct from the manufacturer. Whether you agree with it or not, the shift from ICE to EV is happening much faster than expected. Jim Farley, the CEO of Ford recognizes this. You can either stick your head in the sand and fight the future, or choose to be a part of it. China is the largest car market in the world, followed by the US. By July of 2023, ICE vehicles will no longer allowed to be sold into that market. All of a sudden, an important source of your profit pool is about to disappear for good. And that’s not taking into account literally hundreds of foreign EV manufacturers that are eating GM’s lunch, relegating them to being a bit player in the fastest growing market. You do know that it is a fact that fewer cars are being bought, right? These are facts, not government edicts. The best selling vehicle in Europe is now the Model Y. So let’s dispense with the “big government mandate” rhetoric and look at facts. They matter.
Talk about having your head in the sand, wow.
Who is asking for this conversion? I don’t know anyone who wants an EV or supports the stupidity of converting to all EV’s to purportedly save the environment. Except maybe Crazyfornia It’s a scam.
Okay Boomer 59…. you might want to take a step back and look at the macro trends shaping the global auto industry, not only in the US, but China and Europe. Because if you look at the factual data, it’s clear that the move to EVs is not a wet dream of latte drinking, Birkenstock wearing hippie Crazyfornians.
Global auto trends mean nothing here. US drivers have always been unique with our gas guzzlers, muscle cars, SUV’s, and pickups. European and Asian trends carry no weight. And yes I do believe that EV’s are the dream of leftist lobbies. They can have them, but don’t force them on me.
Speaking of Crazyfornians, Tesla now outsells GM, Ford, Honda, Hyundai-Kia in California and is second only to Toyota who has owned California since the 80’s and by a wide margin (typically GM+Ford). Their market share has decreased to 17% while Tesla is just under 12% and is slated to possibly surpass Toyota mid 2024. There is a massive demand for BEVs and I would guess there is an army of Elon/Tesla haters who would gladly buy any competitor’s BEV if they were actually available. Lost opportunities for GM while ToyNokia spurns BEVs and continues to lose ground to Tesla.
Completely agree. And their fixation fetish with hydrogen is bizarre. Wholly unsuited for cars and going nowhere.
Liberals are against hydrogen because it WORKS.
Do you even have a clue on how hydrogen fuel cells work and what is required in terms of rare earth metals for Proton Exchange Membrane Water Electrolysis (PEMWE) – Iridium and Platinum. Iridium is by far the rarest relevant element (and expensive) on earth as 92% of the ~7T annually mined comes from an asteroid crash in Africa. The majority of Iridium is used in high strength steel production with fuel cells a distant second. Once the asteroid dust is mined, very little production will remain, so its basically finite. Yes, other Pt groups (which are also rare and expensive) can work, albeit much less efficiently, thereby requiring significantly more fuel and a larger PEM. Oh, and remember most fuel cell propulsion systems require a battery as a storage reservoir that the fuel cell replenishes. So, until the Iridium bottleneck is circumvented, mass adoption is not possible. AND if you’re think about burning hydrogen as fuel (ICE style) – no chance even if there were more than the current 107 H2 filling stations in the US. Hydrogen has very low density. There are numerous issues facing H2 storage I won’t even get into, but to just simply drive 100 miles would require a fuel tank encompassing the entire vehicle behind the driver, plus you still generate NOx, think Volkswagen diesel emissions cheating scandal. This is a rabbit hole ToNokia goes down because the Japanese government pays them to.
According to a report by Hydrogen Fuel News¹, the total number of hydrogen car sales in the US in 2022 was **2,707**. This was a **19 percent** decrease from the previous year. The most popular model was the **Toyota Mirai** with **2,094** sales, followed by the **Hyundai Nexo** with **408** sales. Other models sold **205** units combined.
This is not a partisan issue. This is a lack of demand issue. There is NO demand for hydrogen worth discussing. Divide the number of hydrogen sales over the TOTAL number of vehicles sold in the US and let me know what you come up with. I suspect that latte drinking liberals, laissez faire libertarians, and conservatives who understand basic math will likely arrive at the same answer. Zero.
I think your message got lost when you started talking about dealerships. Most consumers could care less about the dealership experience because you do it once every few years. If you don’t like a dealership you go to another. For the past several purchases I didn’t step foot into the dealership until I had picked out the car online and negotiated the price online. I went to the dealership to test drive the car.
EV are becoming popular because of their performance, lack of maintenance, ease of fueling at home, and the amount of tech in them.
China’s market is very different than the US market. And GM has one of the best-selling EVs in the China market – the SAIC-GM-Wuling Mini EV.
Let’s be clear about GM’s role in that partnership. This vehicle is sold by a joint venture between SAIC Motor (50.1%), GM (44%) and Liuzhou Wuling Motors. GM’s revenue share of sales of the Wuling U, a bare bones, cheaply made mini make a profit of 89 yuan on each vehicle sold, or $13.73 USD. Not a major money maker. That stands in contrast to Tesla, whose margins across all vehicles in it’s portfolio is close to 30%, in that it earns about 14K in gross profit per vehicle, with net profit in the 15% range after expenses. Their last quarter margins were a healthy 17.2%. Whose margins would you rather have?
Yet for some reason Tesla is shipping made in China Teslas to Canada. That doesn’t sound like they are flying off the shelves in China.
Tesla China dedicates the first 1.5 months of production for export and the last 1.5 months of a quarter for domestic sales (always have). They are also handicapped by the Chinese government and are not allowed to expand their factory at this time, therefore it is by far the most efficient factory in the world.
That hasn’t been true for China. Telsa China has been using exports as a way to keep production rates as high as possible at the factory. They are exporting from China because they want to maximize the US credits with made in the US vehicles.
‘They are exporting from China because they want to maximize the US credits with made in the US vehicles.’ No sh!t, they send some 3/Ys from China to Canada rather than waste the ones produced in the US – apparently there is demand. They export 3/Ys from China all over the world (except to the US and Taiwan) FOR THE FIRST 1.5 MONTHS OF A QTR WHILE THE REMAINDER OF THE QTR IS FOR DOMESTIC CONSUMPTION which increases each quarter. The basic premise is that the early vehicles produced will reach their targets within the quarter along with local China deliveries. And yes, it keeps this factory busy. Also, the margins are greater outside of China, so obviously they maximize those sales. But I think you are implying that there isn’t enough demand in China for Tesla, so they have to export 1/2 of their capacity. Let’s see what the data says in 2023 when the Chinese BEV subsidies ended. While BYD and Tesla both improved significantly in Q1 YoY, only Tesla surpassed its record Q4 22 sales while BYD and all other major BEV makers did not even come close. Yes, Tesla reduced prices (the rest eventually followed) in a very crowded market, but still demonstrated significant growth. Keep in mind Teslas cost a lot more than BYDs ATP and Tesla could easily reduce them further and still make solid margins unlike BYD. Tesla could dominate the Chinese market, but there is no way the Chinese government will allow them to as BYD is the anointed one especially now as they surpassed VW as the top manufacturer so far in 2023. Look how people reacted in this country when Toyota outsold GM – imagine years of humiliation as VW has dominated China since the 80’s. The Chinese government allows Tesla to do well, but not too well (no 2nd factory or expansion despite Tesla’s multiple requests – and ironically BYD factories were sparred the lock downs last year unlike Tesla and other legacy OEMs). China is clearly trying to dominate the last bastion of Western manufacturing supremacy and BYD is their golden child.
Excellent response. You know your stuff and have done the homework. Very good explanation of Tesla’s China hedge strategy ( that’s what I call what you’ve laid out here). There are quite a few folks here who with all due respect, have a limited understanding of Tesla’s brilliant supply chain mastery. You however do. Kudos.
Yeah, you get it as well, refreshing to see your responses. Very few on here have a clue as to what is going on outside of their bubble – Since everyone they know doesn’t have interest in a BEV, therefore no one anywhere does despite clear data that is readily available. What’s on the horizon for the BIG 3 is far worse than the Japanese invasion of the 80’s and only Jim Farley sees the sky falling.
Keep in mind all three partners count all of the sales, but they should each get credit for a 1/3.
Wuling is basically just a name only with 5% ownership. Prior to 2018 the only way to do business in China was via joint venture.
Correct. Anyone claiming that GM is making any meaningful money from the sales of this low end, cheaply made mini hasn’t been paying attention or has bought into Mary Barra’s smoke and mirrors show.
Story is they make about 8%. Not the biggest but it is a profit and it gains a lot of market share.
Most of these commenters have no clue as what is transpiring around the world and that GM losing its major profit source (China) that will reduce them to a regional player lacking economies of scale, etc. China’s cheap BEVs are coming and the demand for BEVs is massive. At least Jim Farley had his come to Jesus moment.
Could not agree with you more. There’s a freight train coming down the track. China is going to be a graveyard for some legacy OEMs as the wave of Chinese EVs eat their lunch.
GM should have been focusing on the US market instead of China.
GM made $14 billion dollars in profits last year. What did this Analyst project GM to make? Wait a minute, he projected GM to make a lots less. GM will make another $14 billion in profit this year. What did he forecasted GM to make this year? wait a minute, a lot less!!! He have a losing streak, I don’t follow losers.
Lets see their profits in Q2 with disasterous sales losses ongoing in their largest market (China).
AND STILL— ANOTHER $2.00 EPS GM will earn $8.00 per share this year!!!
Perhaps, for now. Nokia and Blackberry made record profits while Apple was ascending as well – then they didn’t. Don’t be lulled by short term gains during disruption. People that bought a smart phone never went back, just as data clearly shows, those who purchase a BEV (especially Tesla) don’t go back to ICE. So, its not like someone who tries Toyota, then returns to GM. When they leave, its permanent.
Meanwhile we wait and wait and wait! But soon the wait will be over and we move on.