GM's Electric Vehicle Production Struggles

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【Summary】GM's CFO, Paul Jacobson, acknowledged that the company has faced challenges in scaling up EV production due to issues with a supplier and module creation technology. The delivery of the Cadillac Lyriq has been slower than expected, but customer reception has been positive. GM aims to increase production to meet the high demand for EVs, as their biggest challenge is not being able to produce them fast enough. The company targets 400,000 cumulative electric vehicles in North America by mid-2024.

FutureCar Staff Aug 30, 2023 10:05 AM PT

GM's Electric Vehicle Production Struggles

During the J.P. Morgan Auto Conference, GM's Chief Financial Officer Paul Jacobson addressed investor questions and acknowledged that the company had encountered some challenges in the production of electric vehicles (EVs). When asked about the Hummer EV and Cadillac Lyriq, Jacobson admitted that GM was still working on scaling both vehicles due to startup challenges.

Specifically, Jacobson mentioned that there were issues with a supplier and the technology related to module creation, which caused a bottleneck in the production process. However, he reassured attendees that the problem had been identified and addressed.

In terms of delivery numbers, GM was able to deliver 122 Lyriqs in 2022. However, in July of this year, the company fell short of its expectations by delivering only over 1,000 Lyriqs. Jacobson expressed GM's efforts to increase the volume of deliveries.

The Lyriq, Cadillac's first EV, generated significant demand as it sold out within ten minutes when reservations opened in September 2021. Interestingly, the majority of buyers were from the younger generation, which is noteworthy considering that the average age of a Cadillac buyer is in their mid-50s, according to Bloomberg.

Unfortunately, customers have experienced delays due to a slow start at the Ultium plant in Ohio, US, caused by software issues with the vehicle. However, Jacobson mentioned that the supply side was improving, although it had been slower than desired. He acknowledged that every startup faces growing pains, and GM was no exception.

Despite the challenges, customer reception for the Lyriq has been positive, and Jacobson expressed confidence in the demand for GM's EVs. The main obstacle lies in the company's ability to produce EVs quickly enough 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. The company aims to produce 50,000 EVs for North America in the first half of 2023 and has a target of 100,000 vehicles for the region in the second half of the year. By mid-2024, GM plans to have a cumulative total of 400,000 electric vehicles in North America.