General Motors is investing tens of billions of dollars to produce a range of new electric cars, and hopes to catch up with Tesla.
But the automaker appears to be far from achieving those ambitious goals. This year, it is struggling to produce a new type of electric vehicle battery intended for electric vehicles that it plans to introduce over the next several years.
“It’s been a little challenging,” the company’s chief financial officer, Paul Jacobson, said on a conference call with reporters Monday afternoon.
In the first half of this year, GM made just 50,000 electric cars, and most of them used an old battery made by a supplier. In the United States, GM has sold just under 2,800 vehicles that use Ultium’s new modular battery packs, which are made at the Ohio plant the company co-owns with LG Energy Solution. Two more Ultium plants are under construction, in Tennessee and Michigan.
General Motors once said that it plans to produce 400,000 electric cars in North America from 2022 to 2024, and more than a million in 2025, the vast majority of which were supposed to use Ultium technology.
Mr. Jacobson said the company expects to produce 100,000 battery-powered cars in the second half of 2023, and that he will provide more information about production plans on Tuesday in a conference call with financial analysts.
For now, the company’s slow rollout isn’t hurting the bottom line. GM said on Tuesday it made a profit of $2.6 billion in the April-June period, up 52 percent from a year earlier. Total revenue was $44.7 billion, up 25 percent.
Mr. Jacobson said the company benefited from higher prices and strong sales of trucks and SUVs in North America. The average price of cars GM sold in the second quarter was $52,000 — an increase of $1,600 from the first quarter of the year.
GM sold 833,000 cars and trucks in North America in the second quarter, an increase of 26 percent over the previous year. In the rest of the world, it sold 147,000 vehicles, nearly 8,000 fewer than the previous year.
While the solid earnings are welcome, many investors are increasingly concerned about the company’s electric vehicle strategy because such vehicles are the fastest-growing segment of the auto industry.
The big fear for investors is that General Motors, Ford Motor and other large automakers could quickly lose customers as more drivers buy battery cars. In China, Europe and California, where electric cars already account for a large and growing share of new car sales, dominant automakers like Volkswagen and Toyota have lost market share to Tesla and Chinese automakers like BYD.
Two years ago, GM CEO Mary T. Barra said the company aimed to double annual revenue by 2030, to about $280 billion. Much of the increased business should come from electric vehicles, and new revenue streams from software and services associated with those cars and trucks. The company has also set a goal of phasing out production of internal combustion models by 2035.
For now, GM is “far behind where it needs to be,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a consulting firm. “If they’re having a problem with the first wave of these new EVs, if they can’t roll it out, it’s not good for the next wave of larger-volume models.”
GM currently offers a few Specialty vehicles that use Ultium battery packs. They include the Cadillac Lyric, which is an SUV; GMC Hummer, starting price around $90,000; and large delivery vans made by a new division called BrightDrop.
In the summer and fall, GM is supposed to add three electric Chevrolets — Blazer and Equinox SUVs and a Silverado electric minivan. The company had previously said the Silverado would go on sale in the spring, but now the truck isn’t expected until the fall.