General Motors is set on going electric, if its $35 billion investment to launch 30 new EVs globally over the next three years is anything to go by.
But the automaker, which will report its first-quarter financial results on Wednesday, is expected to face increasing competition from both legacy automakers and newcomers in the U.S. and internationally. The investment is part of GM’s effort to keep up with competitors such as Volkswagen, which, as the world’s largest automaker, is investing $100 billion to electrify its portfolio.
Meanwhile, materials shortages and supply chain delays have put a crimp in the automotive business lately, affecting availability and pricing, and leaving the near-term future of EVs in question.
What analysts and TechCrunch will look for
Per data from Yahoo Finance, analysts expect GM to report profit of $1.68 per share on revenue of $37.33 billion in Q1 2022. GM reported a profit of $2.06 per share on revenue of $32.47 billion a year earlier.
GM set a goal to sell more than 1 million EVs in North America by the end of 2025, but materials shortages, supply chain issues, and the resulting slowdown in production could prove to be big hurdles. So we’ll be paying particular attention to updates on production runs and supply chain forecasts.
Despite industry-wide uncertainty, GM seems well-positioned to scale battery-electric models by the tens of thousands using its modular Ultium battery platform. The Ultium technology could be a key advantage in helping GM commercialize EVs, as could a partnership with Honda to co-develop, scale and sell electric vehicles by 2027.
So far, early consumer demand for its latest battery-electric models, a six-figure Hummer EV, and a $60,000 Cadillac Lyriq crossover, seems encouraging. In March, GM’s luxury brand, Cadillac, said widespread interest in its first-ever EV prompted it to boost production to 25,000 units this year, up from the 3,200 units previously projected.
But competition in the EV segment is expected to intensify worldwide, especially in China, a key market for GM and most automakers. So we’re interested in hearing GM’s thoughts on keeping competitive as established and startup automakers alike begin flooding the market with scores of new nameplates.
Battery and EV assembly
GM has consistently invested in expanding its battery cell and EV assembly over the past couple of years to control more of its supply chain. Recently, the carmaker said it would invest more than $7 billion in four Michigan factories focused on battery cell and electric truck manufacturing, including a third plant with partner LG Energy Solutions. That means we can expect guidance on when those plants will open and if the timeline remains on track.
The automaker spent $2 billion readying its Spring Hill, Tennessee, manufacturing complex – its largest in North America – to build the Lyriq and other EVs. A $2.6 billion cell factory in Lansing, Michigan, will follow in late 2024. We will also be listening for more details on GM’s forthcoming Ultium battery plant in Lordstown, Ohio.
GM is likely to provide updates on Cruise, its autonomous vehicle subsidiary, and BrightDrop, its commercial electric vehicle concern.
Last month, GM bought out Softbank’s stake in Cruise for $2.1 billion, and made an additional $1.35 billion investment in the company, bringing its ownership to 80%. GM might share details on this deal and perhaps confirm or dispel any rumors that the automaker is planning to spin out Cruise to pursue an IPO.
That might be too juicy to share at an earnings call, but it’s safe to assume we’ll hear some updates for Cruise. The company launched a limited driverless robotaxi service in San Francisco a few months ago, and we’re eagerly awaiting news that Cruise has secured the required permit from the California Public Utilities Commission to start actually charging for its rides.
Last October, Cruise said it would be in “a couple of major cities in the United States” over the next few years, so GM might also share updates for plans to expand into new cities. Finally, the Cruise Origin, the company’s purpose-built AV, might get a mention, too. Mass production at GM’s Factory ZERO assembly plant is slated to begin next year, but with the world’s ongoing supply chain woes, who knows?
Meanwhile, BrightDrop recently scored Walmart as a customer with a reservation for 5,000 e-delivery vans. FedEx also upped its reservation of vans to 2,000 from 500, and might add 20,000 more EVs to that order in coming years. Walmart is expecting a combo of EV600s and smaller EV410s by 2023, so look out for updated guidance on production and delivery dates for BrightDrop’s EVs, as well as announcements of possible other commercial customers.