Our AI writing assistant, WriteUp, can assist you in easily writing any text. Click here to experience its capabilities.

GM says supply chain issues won’t affect EV profitability by 2025

View Original View Raw

Summary

General Motors says that it will be able to achieve profitability for its electric vehicles by 2025, despite concerns about supply chain constraints. GM is expecting to generate more than $50 billion in revenue from sales of its 30 EV models in 2025, with profit margins in the low to mid single digits. The company has signed agreements to secure the battery raw materials needed to support 1 million units of annual capacity in North America by 2025, and is working to reduce cell costs by nearly 40% to an $87 per kilowatt hour by 2025. GM's stock experienced a mid-day spike, rising 1.75% at around 1:45 pm ET.

Q&As

What is GM's goal for electric vehicle profitability?
GM's goal for electric vehicle profitability is to have "the same margin profile" as its internal combustion engine portfolio over the next three years.

How does GM expect to achieve this goal?
GM expects to achieve this goal by increasing efficiencies in its Ultium EV platform and by securing supply chain agreements that are locked in through 2025.

What are some of the challenges GM faces in reaching this goal?
Some of the challenges GM faces in reaching this goal include increased battery raw material costs and macro headwinds.

What are some of the agreements GM has made to secure supplies for its EV production?
Some of the agreements GM has made to secure supplies for its EV production include an agreement with Livent to source lithium hydroxide from its North American facility starting in 2025 and an agreement to secure sustainable cobalt from Glencore's Murrin Murrin mine in Australia.

How will these agreements help GM reach its goal?
These agreements will help GM reach its goal by reducing cell costs and by providing GM with a domestic supply chain for EVs in North America.

AI Comments

👍 It's good to see that GM is committed to electric vehicles and is working to ensure that they will be profitable by 2025. I appreciate that they are working on a variety of fronts to make this happen, from securing raw materials to partnering with other companies.

👎 I'm not convinced that GM will be able to make electric vehicles profitable by 2025. There are a lot of headwinds that they will have to overcome, and I'm not sure that they have a solid plan in place to do so.

AI Discussion

Me: General Motors says that they won't have any issues with profitability for their electric vehicles by 2025.

Friend: That's good to know. I was worried about them because I've heard that the market for electric vehicles isn't doing so well.

Me: Yeah, I was worried too. But it sounds like GM has a plan and they're confident that it will work.

Friend: I hope so. I'd like to see more electric vehicles on the road.

Action items

GM is working to reduce cell costs by nearly 40% to an $87 per kilowatt hour by 2025, and then down to a $70 per kilowatt hour from mid to late decade.
GM has signed binding agreements to secure the battery raw materials to support 1 million units of annual capacity in North America by 2025.
GM is hoping to reduce cell costs by nearly 40% to an $87 per kilowatt hour by 2025, and then down to a $70 per kilowatt hour from mid to late decade.

Technical terms

Supply chain: a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.
Profitability: the state or quality of being profitable.
Headwinds: factors that tend to slow down or impede progress.
Raw materials: materials or substances used in the primary production or manufacturing of a good.
Efficiencies: the state or quality of being efficient.
Binding agreement: a legally binding agreement between two or more parties.
MOU: Memorandum of Understanding, a nonbinding agreement between two or more parties that sets forth the terms and conditions of a proposed transaction.
Volatility: the degree of variation of a measure, typically of market prices, over time.