Curbside Newsstand Update: GM’s EV-Only “Aspirations” Only Impact Light Duty Vehicles – And Is Of Course Subject To Change, As Are All “Aspirations”

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– Posted on January 31, 2021

still rolling coal in 2035

I regret not having had more time to properly analyze GM’s announcement last week. There’s a few key issues that are important to note: GM has said it “aspires to eliminate tailpipe emissions from new light-duty vehicles by 2035”. Aspiration does not equal commitment. GM (and many other companies) has aspired to quite a few things over the decades that never materialized.

And this aspiration only applies to light duty vehicles, meaning passenger cars and light trucks up to 8,500 lbs maximum Gross Vehicle Weight Rating (GVWR). This exempts all of the HD versions of the popular pickup trucks. And it wouldn’t take much to exempt the extremely popular light duty pickups/trucks, which currently have GVWR’s of some 7,000 lbs. The Suburban already has a GVWR of 7,700 lbs. I’m not saying it’s going to happen, I’m just pointing it out.

And GM has a lot of catching up to do, both in its product line and reputation. Remember their “aspirations” to sell hydrogen fuel cell vehicles by 2010?

In 2002, GM CEO Rick wagoner introduced the Hy-wire fuel cell platform that was going to underpin a range of consumer vehicles by 2010. And then there was going to be the two-mode hybrid revolution at GM. And then…

I’m not suggesting anything nefarious in Mary Barra’s announcement, but the timing is very obviously not a coincidence, given the new administration’s push on climate change strategies and likely new incentives for EVs. And then there’s the stock market, which has gone bonkers over any and every EV start up.

Even Eugene’s tiny Arcimoto, which has been building very small numbers of their three-wheeler, has seen their stock jump from $5.39 in October to $24.21 on 1/26, a 450% increase.

Here’s some quotes from GM’s press release on the specifics:

GM will offer 30 all-electric models globally by mid-decade and 40 percent of the company’s U.S. models offered will be battery electric vehicles by the end of 2025. GM is investing $27 billion in electric and autonomous vehicles in the next five years – up from the $20 billion planned before the onset of the COVID-19 pandemic.

Note “globally”, as that includes their joint ventures and affiliates in China, some of which are already building a substantial number of low-cost EVs not relevant to the NA market.

More than half of GM’s capital spending and product development team will be devoted to electric and electric-autonomous vehicle programs. And in the coming years, GM plans to offer an EV for every customer, from crossovers and SUVs to trucks and sedans.

“More than half” means there will still be a very considerable investment in traditional programs.

The company will also continue to increase fuel efficiency of its traditional internal combustion vehicles in accordance with regional fuel economy and greenhouse gas regulations. Some of these initiatives include fuel economy improvement technologies, such as Stop/Start, aerodynamic efficiency enhancements, downsized boosted engines, more efficient transmissions and other vehicle improvements, including mass reduction and lower rolling resistance tires.

It’s not like GM is walking away from its current bread and butter. Profits from its trucks and SUVs are essential to maintain GM’s ability to continue its investment program, as well as just sustain its operations, dividends, etc.

The somewhat painful reality is that GM has a lot of catching up to do. The Chevy Bolt has essentially been a “compliance mobile”, one that GM loses money on in exchange for EV credits. It has to be sold at heavily discounted prices.

At the other end of the spectrum, the GMC Hummer is very expensive; its role being to establish a new macho/cool image for EVs in the market where high-end pickups like Ford’s Raptor have been making hay.

This is all good and fine, but GM has a long way to go, to meet its “aspirations”. Hopefully, unlike the many aspirations of the past, GM actually gets there.