GM's Electric Vehicle Production Struggles

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【Summary】GM's CFO, Paul Jacobson, admitted that the automaker has faced challenges in EV production due to a supplier issue and technology bottlenecks. They have identified and addressed the problem but are still struggling to produce EVs fast enough. Despite positive customer reception and high demand for EVs, GM has been unable to meet production targets. The company aims to produce 100,000 EVs for North America in H2 2023 and 400,000 cumulative EVs by mid-2024.

FutureCar Staff Aug 29, 2023 12:03 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 regarding the automaker's challenges in electric vehicle (EV) production. Jacobson acknowledged that GM had encountered some "startup challenges" in this area.

Specifically, when asked about the Hummer EV and Cadillac Lyriq, Jacobson explained that the company had faced difficulties in scaling production for both vehicles. He mentioned a bottleneck in the process related to module creation, which involves transferring cells from module to pack. However, he assured attendees that the problem had been identified and addressed.

In terms of the Cadillac Lyriq, GM delivered 122 units in 2022, which fell below the company's expectations. However, in July of the same year, over 1,000 Lyriqs were delivered, indicating efforts to increase production volume. Notably, the Lyriq, Cadillac's first EV, generated significant demand, with reservations selling out within ten minutes. Buyers, primarily from the younger generation, represented a departure from the typical Cadillac buyer profile, which tends to be older.

Despite positive customer reception, there have been delays in delivering the Lyriq due to a slow start at the Ultium plant in Ohio, as well as software issues with the vehicle. Jacobson acknowledged these challenges, emphasizing that any startup experiences growing pains.

However, Jacobson expressed confidence in the outlook, stating that GM feels very good about the demand for EVs in the market. The main challenge lies in the production capacity, as the company has not been able to produce EVs quickly enough to meet 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 to a supplier issue. Despite these challenges, GM produced 50,000 EVs for North America in the first half of 2023 and aims to manufacture a total of 100,000 vehicles for the region in the second half of the year. The company's target for North America is to have 400,000 cumulative electric vehicles by mid-2024.