EV production struggles

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【Summary】GM's Chief Financial Officer, Paul Jacobson, acknowledged that the automaker has faced challenges in scaling up EV production due to issues with a supplier and technology around module creation. Despite positive customer reception and high demand for EVs, GM has struggled to produce them fast enough. The company delivered 1,000 Lyriqs in July, below expectations. GM aims to produce 400,000 cumulative EVs in North America by mid-2024.

FutureCar Staff Aug 18, 2023 6:34 AM PT

During the J.P. Morgan Auto Conference, GM's Chief Financial Officer Paul Jacobson addressed investor concerns regarding the challenges the automaker has faced in electric vehicle (EV) production. Jacobson acknowledged that GM had encountered some "startup challenges" in scaling the production of vehicles like the Hummer EV and Cadillac Lyriq. He specifically mentioned issues with a supplier and the technology involved in module creation, which had created a bottleneck in the production process. However, Jacobson assured attendees that the problem had been identified and addressed.

In 2022, GM delivered 122 Lyriqs, but in July of this year, the number increased to over 1,000. Although this fell short of the company's expectations, Jacobson emphasized that GM was working to increase the volume of deliveries. The Cadillac Lyriq, Cadillac's first EV, generated significant interest as it sold out within ten minutes when reservations opened in September 2021. Notably, the majority of buyers were from the younger generation, a departure from the typical Cadillac buyer who is in their mid-50s. However, customers have experienced delays due to a slow start at the Ultium plant in Ohio and software issues with the vehicle.

Despite the challenges, Jacobson expressed confidence in the demand for GM's EVs and the positive reception from customers. He acknowledged that the production process had been slower than desired but assured that the supply side was improving. Jacobson recognized that every startup faces growing pains and GM was not exempt from that. The main challenge for GM now is to increase the production rate of EVs to meet the demand.

Concerns and criticisms surrounding GM's EV production have been circulating for some time. Earlier this year, CEO Mary Barry attributed the slow start of GM's electric vehicles to a supplier issue. GM produced 50,000 EVs for North America in the first half of 2023 and aims to manufacture 100,000 vehicles for the region in the second half of the year. By mid-2024, the company's target is to have a cumulative total of 400,000 electric vehicles in North America.