General Motors had originally targeted 400,000 electric cars by the end of 2023, but has delayed that goal as EV production slows.
As the end of the year nears, the total losses due to the semiconductor shortage are coming into focus.
Dramatically better than 2021, the chip shortage in 2022 represents a big improvement, partially offset by the lower expectations for demand this year. An anticipated soft market next year will also provide a lower starting point for the production outlook. Fortunately, the waning demand for advanced chips following the Covid-19 shutdowns has eased the need for semiconductors in many markets outside of automotive. Moving some of the production capacity to automotive chips could ease the tight supply and might shorten the production bottlenecks, possibly by the middle or late in the new year.
The shift to electric vehicles has been more about changing the image of legacy automakers than cleaning up the environment. Companies like Volkswagen had a tarnished image to fix and the wide-ranging push into electrics shows how quickly stockholders needed the change. For some companies, such as General Motors, the shift is to change the mind of the stock market to view these century-old combustion-engine makers as modern tech companies.
This story is an extract from the December 2022 issue of AutoForecast Solutions’ monthly report. AutoForecast Solutions is the only fully integrated solutions provider of vehicle, powertrain, drivetrain and electrification production forecasting, business planning software and advisory services to the global automotive industry.
Billions of dollars are being fed into this move to make the shift as quickly as the market will handle. But General Motors is tailoring its plans to its own revised vision of that market acceptance.
CEO Mary Barra told stakeholders that GM’s coming electric vehicles will be delayed. The original plan targeted 400,000 electric vehicles by the end of 2023 and now that goal is in the middle of 2024.
The slowing of the ramp-up can be seen immediately. Just a month or so ago, more than 10,000 of Cadillac’s much-anticipated Lyriq crossover were planned to roll out of the Spring Hill factory this year. The revised plan now expects fewer than 1500 to be produced this year. A similar change has hit the very expensive GMC Hummer EV.
The prediction from GM’s notoriously optimistic crystal ball has been revised downward, with half as many Lyriqs and Hummer EVs expected to be produced next year, and similar cuts to all other North American EVs on the schedule for 2023.