Detroit — As the auto industry grapples with the pace of the electric-vehicle transition, General Motors Co. still has a plan in place to be all electric by 2035, but will adapt based on customer demands, CEO Mary Barra said Monday during an Automotive Press Association event.
“We’re going to be led by the customer,” Barra said. “But I do believe this transition will happen over a period of time.”
Supply issues have affected GM’s EV production, making Barra “disappointed” with where the Detroit automaker GM is in its EV ramp-up, but she wouldn’t budge on saying whether the automaker plans to bring back hybrids to the North American market. The Detroit News reported last week that GM was considering the return of hybrids here.
“We have the (hybrid) technology,” she said, noting that she still believes that “you want to move to EVs as quickly as you can … but we have the technology. We’ll continue to look at where the market is, where the regulatory environment is.”
Barra’s comments come as GM’s next steps are being watched closely as it works through the supply issues affecting EV production and as it deals with challenges facing its AV unit Cruise LLC, which has been under scrutiny for its safety standards. Barra and other executives are now trying to assure investors that after a tough contract battle with the UAW this summer and fall, the automaker is focused on hitting its EV targets, including reaching 1 million units of EV capacity in 2025 and on the future of AV tech.
At the Barclays Global Automotive and Mobility Tech Conference last week, Chief Financial Officer Paul Jacobson told financial analysts that the automaker still thinks it can hit mid-single-digit operating profit margins with its electric vehicles by 2025 as it scales production.
GM on Wednesday reinstated full-year guidance of $11.7 billion to $12.7 billion in operating profit after losing $1.1 billion in operating profit during the UAW’s 46-day targeted plant strike. Overall, its new contracts with the Detroit-based UAW and Unifor, the union representing Canadian autoworkers, will cost the company $9.3 billion over the life of the deals.
In an effort to boost confidence in the company, GM also announced last week a $10 billion accelerated share repurchase (ASR) program and increased its common stock dividend by 33% beginning in January.
Barra told shareholders last week that she’s “disappointed with our Ultium-based EV production in 2023 due to difficulties with battery module assembly.” She added the company has “made substantial improvements both to the process and to the organization responsible for this work. In 2024, we expect significantly higher Ultium EV production and significantly improved EV margins.”
Looking into next year, Barra said Monday, “There’s so many positive things that are going to be happening.”
“We’ll still have to adjust and change our tactics as we learn and see where the customer is at, we see what’s happening across the market,” she said. “But I really like where we’re positioned.”
Next year, Barra and the GM team will still have to work through challenges facing the Cruise AV unit, which came under intense scrutiny after an Oct. 2 incident in which a Cruise vehicle hit a pedestrian in San Francisco after the person was hit by another car driven by a human while crossing the street; the first collision threw the pedestrian into the pathway of the Cruise AV. The pedestrian was pinned under a tire on the Cruise vehicle and dragged for about 20 feet as the car attempted to move off the road, the Associated Press reported.
Later that month, the California Department of Motor Vehicles suspended Cruise’s deployment and driverless testing permit. The National Highway Traffic Safety Administration’s Office of Defects Investigation opened a case on Cruise in mid-October. That case remains open.
Cruise has suspended all of its driverless rides and in November recalled 950 of its cars to update software on them. Cruise is now working to regain the trust of the public and regulatory agencies. It has launched a search for a chief safety officer and retained a law firm to examine company’s response to the Oct. 2 crash. Its former CEO and founder, Kyle Vogt, resigned amid the troubles.
The AV company could be fined for allegedly misleading regulators and will have to show up to a Feb. 6 hearing to explain why the company shouldn’t be fined, the California Public Utilities Commission said. Cruise could pay up to $100,000 per incident in which it failed to disclose information to regulators about the accident, Bloomberg reported Monday.
Barra on said Monday that GM is “very focused on righting the ship,” at Cruise because the technology “can make the way we move from point A to point B safer.”
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