A strike is only the most immediate issue facing the two biggest U.S. auto makers. The existential threat posed by electric vehicles is the bigger problem.
Read More The problem is, most of the rewards are flowing to just one company, Tesla . Despite big pushes by a raft of rivals, Elon Musk’s pioneering company still accounts for nearly 60% of all EV sales in the U.S., down only slightly from two years ago. GM has managed to take just 6% of the market, while Ford has 5%. If the two Detroit icons hope to be long-term players in EVs, which look to be the future of cars, they have little choice but to keep spending huge sums of money.
GM had a better start to 2023, selling about 36,000 EVs, up from fewer than 8,000 in the first half of 2022, though the 2022 figures were affected by battery problems experienced with the Chevy Bolt. First-half sales increased about 15% from the second half of 2022, putting GM back in position as the second-best seller of EVs in the U.S. GM says it doesn’t expect EVs to be profitable until 2025, but it doesn’t break out figures for the division.
“Everyone has struggled to manufacture EVs,” says Benchmark analyst Michael Ward. “Everyone. They’re not easy.” “At the end of the day, what consumers care about is the cost of the EV and the range,” says Eli Horton, ETF portfolio manager at activist investor Engine No. 1. Both companies tell Barron’s they are confident that their strategies will work. That doesn’t mean things can’t be improved.
GM, for its part, needs to target more segments of the EV market. Its recent launches, including the GMC Hummer and Cadillac Lyriq, are priced at the higher end, and the coming Cadillac Celestiq starts north of $300,000. GM is betting big on its EV technology investments, which will lower costs while providing longer range and more features than the competition, and it plans electric versions of the Chevy Blazer and Chevy Silverado, which are due before the end of the year.