General Motors is investing tens of billions of dollars to produce a host of new electric vehicles and, it hopes, catch up with Tesla.
But the automaker appears to be some way from achieving those ambitious goals. This year, it is striving to produce a new type of electric car battery pack intended for electric vehicles it plans to introduce in the coming years.
“It’s been a bit challenging,” the company’s chief financial officer, Paul Jacobson, said in a conference call with reporters Monday afternoon.
In the first half of this year, GM built just 50,000 electric vehicles, and most of them used an older battery pack made by a supplier. In the United States, GM sold fewer than 2,800 vehicles using its new Ultium modular battery packs, made at an Ohio factory the company owns with LG Energy Solution. Two more Ultium factories are under construction, in Tennessee and Michigan.
GM once said it planned to build 400,000 electric vehicles in North America between 2022 and 2024, and more than a million in 2025, the vast majority of which were supposed to use Ultium technology.
Mr Jacobson said the company expected to build 100,000 battery-powered vehicles in the second half of 2023 and would provide more information on production plans on Tuesday in a conference call with financial analysts.
For now, the slow launch is not hurting the company’s results. GM said Tuesday it made a profit of $2.6 billion from April to June, an increase of 52 percent from a year earlier. Revenues totaled $44.7 billion, up 25 percent.
Mr. Jacobson said the company had benefited from higher prices and strong sales of pickup trucks and sport utility vehicles in North America. The average price of vehicles GM sold in the second quarter was $52,000, about $1,600 more than in the first quarter of the year.
GM sold 833,000 cars and trucks in North America in the second quarter, an increase of 26 percent from a year earlier. In the rest of the world it sold 147,000 vehicles, about 8,000 less than a year earlier.
While the strong earnings are welcome, many investors are increasingly concerned about the company’s electric vehicle strategy because electric vehicles are the fastest-growing segment of the auto industry.
A big fear for investors is that GM, Ford Motor and other big automakers could quickly lose customers as more drivers buy battery-powered cars. In China, Europe and California, where electric vehicles already account for a significant and growing share of new car sales, once-dominant automakers like Volkswagen and Toyota have been losing market share to Tesla and Chinese automakers like BYD.
Two years ago, GM CEO Mary T. Barra said the company aimed to double annual revenue by 2030, to about $280 billion. Much of the increased business is expected to come from electric vehicles and new revenue streams from software and services tied to those cars and trucks. The company has also set a goal of phasing out the production of internal combustion models by 2035.
Right now, GM is “way behind where it should be,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a consulting firm. “If they have problems with the first wave of these new EVs and can’t roll them out, that’s not good for the next wave of higher volume models.”
GM currently offers only a few niche vehicles that use Ultium battery packs. They include the Cadillac Lyriq, an SUV; the GMC Hummer, which starts at around $90,000; and large delivery vans made by a new division called BrightDrop.
This summer and fall, GM is supposed to add three electric Chevrolets: the Blazer and Equinox SUVs and an electric Silverado pickup. The company had previously said the Silverado would go on sale in the spring, but now the truck isn’t expected to arrive until the fall.