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GM CEO Thinks U.S. Will Take Decades To Switch To EVs — She Could Be Right, And Here’s Why

Bloomberg reports that GM’s CEO, Mary Barra, recently said that it will take decades for electric vehicles to be the dominant form of transportation in the U.S.

Bloomberg reports that GM’s CEO, Mary Barra, recently said that it will take decades for electric vehicles to be the dominant form of transportation in the U.S. Barra was on Bloombergs’s Leadership Live With David Rubenstein for a short interview when she said this.

Barra sees electric vehicles as an important part of the future at GM. “Right before the COVID crisis hit, we actually had investors, dealers, our employees, media through what we call an EV Day. And we took them through our technology from a battery perspective.” She added that GM had just announced the Ultium battery platform, which will have 400-volt battery packs and up to 200 kW fast-charging capability.

Barra also said that she was very excited about the industry evolution. “In my almost 40 years of being at General Motors, I think that this is one of the most exciting times as we transition to electric vehicles.” Rubenstein then asked her to elaborate on that. “Do you expect in ten years, or twenty years, General Motors will produce only electric vehicles or some period of time in the future?”

“I think it will take longer than that. I think it’ll happen over a period of years and decades when you look at the transition that needs to occur,” she replied. She noted there are around 250 million cars in the U.S and transitioning all of them into EVs will take some time. (Editor’s note: Of course, 250 million is about all vehicles on the roads, not annual sales from automakers, which are vastly lower than that. It’s not entirely clear here if Barra misheard/misunderstood the question, or answered it and then pivoted. Some, including Johnna, are giving her the benefit of the doubt and choosing the first option.)

When I first saw the headline, I immediately thought GM was just not doing its research on EVs. With Tesla pushing electrification constantly and making it popular, the thought that EVs wouldn’t be dominant for decades to come seemed ludicrous. However, it appears GM just had what Tesla often has written about it: a very catchy headline that is worded to create a sense of lack of demand.

It’s not that the demand is lacking, it’s about what we already have. 250 million cars is a lot of vehicles. When you look at it from the perspective of transitioning 250 million cars to electricity, Barra actually makes sense.

I know many people who have this mentality: If I’m going to buy a new car, I’ll get a good one, like a Tesla, but for now, I’ll just drop $3,000 on this used one and hope it lasts me for the next six months. McKinsey estimated that Americans buy 39.4 million used cars each year, compared to 17.3 million new ones in 2018. Also, used vehicle sales are expected to increase faster than new vehicle sales over the next 5 years.

I think it is a positive thing that GM is excited about electric vehicles. It is developing more electric vehicle models and even working on a van. Supplying enough EVs to replace all of the existing and future ICE vehicles will not be fast, it will take time — and this is why what Mary Barra says makes sense.

I remember seeing a tweet from Elon Musk about competition. His real competition isn’t those “Tesla killers” but all of the ICE vehicles that are on the road today as well as the new ones coming out each year. Tesla is doing a great job by leading by example, but I think what many need to consider is this question: What will it take for every automaker to completely electrify all of their vehicles? Not just some — but every single line.

 
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Johnna owns less than one share of $TSLA currently and supports Tesla's mission. She also gardens, collects interesting minerals and can be found on TikTok

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