General Motors has set an annual target for one million EV sales globally by the mid-2020s - but Wood Mackenzie predicts the automaker will only meet half of that target by 2026
General Motors (GM) is expected to hit five million electric vehicle sales by 2030, according to an energy analyst.
The US automaker is currently scaling up its EV fleet as the world attempts to move away from fossil fuels towards lower-carbon alternatives.
Although the Detroit-headquartered firm has set an annual target for one million EV sales globally by the mid-2020s, energy researcher Wood Mackenzie predicts the company will only meet half of that target by 2026.
The market is also currently suffering from the devastating impact of the coronavirus pandemic, as BloombergNEF expects global EV purchases to drop by 18% to 1.7 million in 2020, “interrupting 10 successive years of strong growth”.
How could General Motors hit its electric vehicle sales target?
GM’s primary markets are currently North America and China, while the company also has a strong market share in South America.
Due to declining sales and profits, GM sold its European brands in 2017 and exited the regional market.
The EU is the second-largest EV market in the world and is expected to represent up to 25% of global EV sales by 2026, according to Wood Mackenzie.
Without a presence in Europe, it claims GM will need to win 30% of the US and 16% of the Chinese EV market to achieve its target of one million annual EV sales by 2026. It currently has 4.5% and 6.7%, respectively.
Wood Mackenzie said this challenge is compounded by the fact that 17% of current GM sales are from pick-up trucks, a segment “not expected to electrify as quickly as passenger cars”.
Ram Chandrasekaran, Wood Mackenzie’s principal analyst, claims that achieving GM’s target would entail capturing 12% of the global EV market share by 2026.
“This will be challenging, particularly given its notable absence from the EU,” he added.
General Motors’ move towards electrification
Despite this drawback, Chandrasekaran said GM “does have a clear-cut strategy towards electrification”.
“It has divested from plug-in hybrids, with 90% of its EV sales coming from battery electric vehicles (BEVs),” he added.
“Earlier this year, GM announced a further $20bn investment for new electric and autonomous vehicles.”
The automaker’s modular electric drive platform is designed to fit vehicles of different classes, according to Chandrasekaran.
“GM claims it will have a battery control unit at a module level, which can lead to more cost-effective repairs,” he added.
“The chemistry of the battery packs will be NCMA, therefore improving costs further by reducing cobalt by up to 70%.
“However, neither the platform nor the battery technology is ground-breaking.”
General Motors’ battery manufacturing plant in the US
GM has also agreed a joint venture with LG Chem, a Korean chemical firm, for a battery manufacturing plant in the US, with both companies set to contribute half of the $2.3bn investment for the facility.
If completed, Chandrasekaran claims this will be “one of the largest battery manufacturing facilities in the world”.
“The factory is intended to supply packs for GM’s electric pick-up trucks to be sold in the US,” he added.
“Initial planned capacity is 30 gigawatt-hours, but the plant will be built with future expansion in mind.”