Beneath a banner proclaiming “Zero Crashes, Zero Emissions, Zero Congestion,” General Motors’ CEO Mary Barra announced her company’s plan to produce 100 percent electric vehicles by 2035, the most sweeping overhaul of any major global automaker in the history of the industry.
While the wisdom and strategy can be debated, there is no arguing the fact that GM’s decision to wean itself — and the world — off of fossil fuels will have tectonic effects that will be felt far beyond Detroit, and will take along for the ride scores of ancillary businesses that keep America’s love affair with the automobile rolling. From gasoline stations and the refineries that supply them, to oil changes (EVs don’t need them), charging stations, power plants, factory rebuilds, battery sourcing and recycling, GM’s extreme makeover is predicated on a holistic redesign and worldview.
“Climate change is real, and we want to be part of the solution by putting everyone in an electric vehicle,” Barra said atop the company’s announcement, which noted that step one would be to add 30 new electric vehicles to its global fleet in the next four years.
GM’s big transition was not exactly out of the blue, as it had been tangling recently with some of its Buick and Cadillac dealers that were not up for making a major investment in rebuilding their dealerships to herald the coming EV revolution. As the argument goes: Just because the mothership wants to go EV, why should we have to?
Given that GM is touting the end of crashes and congestion, its transformation plan is clearly a statement about autonomous vehicles (AVs), too, a mega-shift that will only accelerate the integration of the tech and automotive industries.
By embracing the dual EV and AV strategies, GM has given a de facto endorsement to the changing dynamics that have made segment leader Tesla the behemoth it is today — its $750 billion market value is about 10 times that of GM’s. And it’s not as if GM shares have been slumping in the past year, having themselves doubled in value since their lockdown lows last March.
It also adds validity to the continued drips of progress being reported about the development of Apple’s so-called iCar, including recent talks of an EV-AV tie-up with South Korea’s Hyundai.
For now, Apple’s entry into automotive has been targeted for 2024, and the cash-rich Cupertino, California device maker has done nothing to dispel such talk since it was reported in the fourth quarter.
Tesla Vs. The Rest
To be sure, GM’s move will surely be followed by similar EV/AV transitions by other manufacturers, all of whom are chasing Tesla, which continues to build, grow and struggle to meet demand.
Other players in the burgeoning EV/AV sector include China’s Li Automotive, Arizona-based Nikola and Canada’s ElectraMeccanica, which was founded in 2015.
There are, of course, dozens of other companies — including a GM/LG Energy partnership — that are vying to push the boundaries of battery-making, while at the same time the nascent charging station industry is becoming increasingly competitive.
More broadly speaking, the EV/AV uptrend will also reshape the tech industry.
“The increase in consumption of semiconductors by the auto industry is primarily driven by the market evolution toward autonomous, connected, electric and shared (ACES) mobility,” stated a report from the U.S. International Trade Council. “Conventional vehicles contain an average of $330 [worth] of semiconductor content, while hybrid electric vehicles can contain up to $1,000 and 3,500 semiconductors.”
The Truck Problem
One of the main areas of skepticism and concern surrounding a shift to EVs has been their inability to meet the demand of America’s massive — and lucrative — market for large SUVs and pickup trucks.
But even there, manufacturers are rushing to re-tool and launch new trucks, including the new Hummer EV, which GM touts as “the world’s first all-electric super truck”, but clearly not the last.
“The quiet revolution starts now,” state ads for the new Hummer EV, touting the Detroit-built vehicle’s power, technology and off-road capability that “will leave everything you thought possible in a cloud of dust.”