We know that Barra spent most of this year pledging to surpass Tesla as the EV leader. “We want to lead in the EVs. Full stop,” said Barra in January during an interview with CBS. Coming from the leader of the biggest carmaker in the U.S., such a statement is a declaration of war. And indeed, GM pledged tens of billions to the goal of becoming the new EV leader by building battery plants, EV plants, and all that it takes to churn out millions of EVs per year.
Not only that, but later, Barra announced that GM would overtake Tesla “by mid-decade.” This escalated quickly; you have to agree. And just as quickly, it deflated. By May, the goal became focused on the U.S. territory only. It was again reinforced earlier this month in an interview with Associated Press, where the 2025 deadline is clearly mentioned. And then there was silence until the Q2 2022 earnings call.
Something interesting happened there when GM announced the big deals it signed with LG Energy Solution and other suppliers to secure raw materials and batteries for producing its Ultium vehicles. The U.S. Government also became an investor in the company after lending $2.5 billion to help GM boost battery production.
“GM now has contractual commitments secured with strategic partners for all battery raw material to support our goal of 1 million units of EV capacity by the end of 2025,” said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain.
Wait, what? That’s right, GM aims now for one million EV annual capacity. This is further confirmed in a slide in the Q2 earnings deck, which you can find attached below. “We have binding agreements securing ALL battery raw materials supporting our goal of 1 million units of annual capacity in North America in 2025,” reads the slide. That’s a lot less ambitious than we thought and at a level that risks derailing Mary Barra’s plans to overtake Tesla, be it only in the U.S.
We know that Tesla Fremont has an annual production capacity of 650,000 EVs right now, and Giga Texas is listed in the Q2 shareholder’s deck with a total of “more than 250,000 EVs.” This means Tesla is now with the U.S. production where General Motors wants to be in 2025. This sure doesn’t sound like “overtaking Tesla” unless Barra believes Tesla will remain frozen in time for more than three years.
Most likely, Giga Texas will get to at least 500,000 units of production capacity next year, with a huge possibility to double that capacity by 2025. And it’s also likely that Giga Texas would be copy-pasted to at least another location in North America by the same time. Unless GM becomes a lot more ambitious in its goal to become the EV leader, there’s no way it can get to these insane production numbers in such a short time.