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General Motors To Start Making Profit From Their Electric Vehicles
General Motors (GM) CEO Mary Barra confirmed in an interview with The New York Times that the company will start making a profit on its electric vehicles by the end of this year.
Namely, Tesla is currently leading the electric vehicle market in the US, making a profit as early as 2021. Ford, otherwise the second-largest EV maker in the US, posted losses of more than $1 billion in the first two quarters of this year on its Model e line of EVs. Other manufacturers that exclusively deal with EVs, such as Rivian and Lucid, also do not make a profit.
Demand for EVs continues to grow, but that growth in the US has varied, forcing manufacturers to adjust their launch strategies and include more hybrid models in their portfolios. One of the main challenges to the spread of EV popularity remains the high price. However, buyers can take advantage of tax credits of up to $7,500, provided that the vehicles are manufactured in the US and meet strict criteria related to the price and supply of battery materials. These rules are designed to keep the US competitive with China, which produces EVs at lower prices.
However, only a few GM models, such as the Chevy Equinox and Blazer EV, are currently eligible for the tax credit. GM is well aware of this and invests in reducing battery prices to make more models available to customers with these incentives. GM also plans to cut costs by introducing cheaper lithium-iron-phosphate (LFP) batteries in future models, like those already used by Tesla and Ford.
All this, along with the opening of new battery factories in Michigan and Indiana, should result in higher profits for GM.
