GM's Electric Vehicle Production Struggles

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【Summary】GM's Chief Financial Officer, Paul Jacobson, admitted that the automaker has faced challenges in scaling EV production, particularly with a supplier and module creation technology. Despite positive customer reception and high demand, GM has struggled to produce EVs fast enough. The company aims to produce 100,000 vehicles for North America in the second half of 2023 and reach a cumulative total of 400,000 electric vehicles in the region by mid-2024.

FutureCar Staff Aug 29, 2023 6:46 AM PT

GM's Electric Vehicle Production Struggles

During the J.P. Morgan Auto Conference, GM's Chief Financial Officer Paul Jacobson addressed investor concerns about the company's electric vehicle (EV) production. He acknowledged that GM had encountered some "startup challenges" in this area.

Specifically, when asked about the Hummer EV and Cadillac Lyriq, Jacobson explained that GM had faced difficulties in scaling production for both vehicles. He mentioned a supplier issue and a bottleneck in the module creation process as factors contributing to the challenges.

However, Jacobson assured attendees that GM had identified the problem and taken steps to address it. The company is committed to improving its production capabilities.

In terms of sales figures, GM delivered 122 Lyriqs in 2022. While this number was below the company's expectations, the delivery volume increased to over 1,000 Lyriqs in July. GM is actively working to further drive up the volume.

The Cadillac Lyriq, Cadillac's first EV, generated significant demand. When reservations opened in September 2021, the vehicle sold out within ten minutes. Notably, the majority of buyers were from the younger generation, representing a departure from Cadillac's typical customer demographic of people in their mid-50s.

However, customers have experienced delays due to a slow start at the Ultium plant in Ohio, as well as software issues with the vehicle. Jacobson acknowledged these challenges and noted that the supply side of production has been slower than desired. He likened the situation to growing pains experienced by any startup.

Despite the challenges, customer reception of the Lyriq has been positive, which gives GM confidence in the future demand for EVs. Jacobson expressed optimism about the outlook, stating that the company feels very good about the demand set to come to market. The main challenge lies in ramping up production to meet this 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. Nonetheless, the automaker remains committed to its goals, aiming to produce 50,000 EVs for North America in H1 2023 and targeting a cumulative total of 400,000 electric vehicles for the region by mid-2024.