GM Embraces Schizophrenia: One Company For Electric Cars In China, One Company For Trucks In America

Editor’s Note: Ford seems to suffer from the same malady.

Mary Barra, CEO of General Motors, promised the company’s stockholders last month that the company would make a profit on the electric cars it sells by 2021. Just how, exactly? Reuters spoke with a dozen industry sources both within and outside General Motors to find out. The answer it got was a combination of low cost, flexible vehicle designs, proprietary battery technology, and high volume production to spread costs over a larger number of vehicles. But here’s the thing — that high volume will take place mostly in China.

Image by Mitch Stone

GM’s strategy appears to be to split itself into two components. One will manufacture electric and autonomous cars for world markets in China, and the other will continue to grind out humongous fossil-fueled trucks and SUVs for the domestic market. Some may find that thought depressing, but at least certain parts of the world will reap the rewards of zero emissions transportation even if Americans continue to wallow in their own effluent for a while longer. In fact, part of GM’s strategy is to double down on large pickup truck production with new offerings scheduled to arrive in 2019.

One GM insider tells Reuters that when the Chevy Bolt came out and was warmly received by customers and members of the press, “It was a ‘holy shit’ moment that made us rethink what might be possible.” If that’s so, then what was the attitude within the company before the Bolt was released? Was is seen as just another compliance car for West Coast treehuggers?

A big part of the GM plan is altering the chemistry of its EV batteries to eliminate cobalt, the most expensive component used in today’s batteries and one whose price on the world market is rising rapidly. Cobalt prices hit a record high this month on the London Metal Exchange. Not only does nickel allow batteries to store more energy, it is significantly more abundant and therefore less costly than cobalt. GM’s estimated 1700 battery engineers are also working on more efficient packaging and better systems for managing energy flow and battery cooling.

The results are expected to cut the company’s cost of battery cells for electric vehicles to under $100 per kilowatt-hour by 2021. They are estimated to be $145 per kilowatt hour today, which makes the price of the battery for the Chevy Bolt about $12,000 — one third of the cost of the car. Jon Bereisa, a former GM engineering director who helped develop the Chevrolet Volt and was involved in much of the company’s early lithium ion battery development tells Reuters the next generation Bolt “could deliver a 45% increase in range for about the same (battery) pack cost, or the same range at 45% less pack cost.”

GM’s Chinese partner is SAIC. Together, the two companies are creating new production facilities in China that will be significantly smaller, less complex, and more efficient than conventional auto manufacturing plants. Another source within GM tells Reuters that the company is developing a new “plug and play” architecture for its future electric vehicles that will be modular and flexible enough to work with batteries of different sizes as well as hydrogen fuel cells. GM and Honda are cooperating on fuel cell research and development.

Mark Reuss, GM’s head of global product development, told the press recently that the quest for lower cost batteries requires a coordinated approach that focuses on continuous enhancements in battery technology and packaging. “There are no silver bullets here,” Reuss said, and the company has a lot of work to do.  It’s called ‘product development’ for a reason.” Pam Fletcher, vice president in charge of GM’s global electric vehicle programs, tells Reuters, “There’s a lot of stuff that we choose not to patent because we don’t want to make it visible before the new technology goes into production.”

For those of you who wonder when the major US car companies are going to get serious about making electric cars for the North American market, the answer appears to be they aren’t going to — ever. Not until the waves begin breaking over the Renaissance Center in Detroit and Americans begin dropping dead in the streets from breathing in nitrogen pollution and fine particulates.

Who will they sell their Super Duper Stupid Duty trucks to then? That’s a “holy shit” question that apparently never gets asked within the rarefied confines of the C suite at GM. Don’t worry about GM, though. It can pack up and move to Beijing without a backward glance if it chooses to. That’s the beauty of being a global corporation — you can run away from your messes and leave others to clean them up. Corporate schizophrenia can conveniently solve most conflicts that afflict the business community, particularly if the consequences for society can be ignored.