Automakers are on the cusp of an entirely new era.
The transition to electric vehicles is quickly becoming more than just theoretical: More models are coming onto the scene every day. This week, the Inflation Reduction Act was signed into law, enshrining a new structure for EV tax credits and offering a boost to domestic critical mineral mining. The transition isn’t coming a moment too soon, given that the transportation sector makes up the largest share of greenhouse gas emissions in the U.S.
In early 2021, General Motors became the first conventional car company to pledge to sell only zero-emission cars and trucks by 2035. And GM chair and CEO Mary Barra said the company’s goal is winning the “long game” when it comes to EV sales. To meet it, though, will require playing a bit of catchup.
In the last few years, a number of GM’s competitors have made ambitious pledges of their own, though the legacy automakers as a group have continued to lag behind EV-only stalwart Tesla in EV sales. Tesla delivered 254,695 new vehicles to customers in the second quarter of 2022, whereas GM’s Chevrolet and GMC brands together delivered just 7,217 plug-in EVs. Meanwhile, Ford’s EV second-quarter sales numbers are more than double GM’s, and the company has at least 200,000 pre-reservations for the electric version of its F-150 truck, the best-selling vehicle in the U.S.
Even so, GM feels its strategy is a winning one, targeting affordability via options like the Chevy Bolt — hovering above $25,000 for the 2023 model, after a dramatic $6,000 price cut — even as its competitors peddle flashier and pricier vehicles. And as the race for materials to build this wave of new EV models heats up, GM is prioritizing the longevity of its battery supply and manufacturing resources both in the U.S. and abroad.
Speaking with Protocol in the wake of the Inflation Reduction Act becoming law, the company’s vice president and chief sustainability officer Kristen Siemen’s outlook was positive: “We’re well on our way,” she said.
This conversation has been edited for clarity and brevity.
Do you anticipate that the IRA might make GM’s transition to EVs more challenging?
While some of the provisions are certainly challenging and won't be achieved overnight, we're confident that the investments that GM has been making in manufacturing and our workforce infrastructure are really going to enable the U.S. to be a global leader in electrification both today and in the future. We're excited about the provisions that will accelerate the adoption of EVs and strengthen American manufacturing and jobs: everything from the customer purchase incentives to tax credits and support for domestic mining and battery production. I think everything that’s been put in place to support the transition will be a real positive for the industry and for the country.
There have been a number of announcements from GM and its competitors in recent months about securing agreements for battery materials. What is GM’s approach, especially given the domestic sourcing requirements instituted by the IRA?
We have binding agreements for all of the battery raw materials that support our goal of a million units in North America by 2025; that includes lithium, nickel and cobalt. And we have agreements to supply the cathode active materials. [The Korean chemical giant] LG Chem has been a great partner with us for a number of years, and to have those battery assembly plants for cell manufacturing here in the U.S. is a true sign of how far we are on this transition to EVs. I've toured a few of those facilities, and things are really humming.
We're very committed to U.S. manufacturing and production. About 50% of our U.S. production will be converted to EVs by 2025, and we've announced four battery plants here in the U.S. We're well on our way to converting our entire portfolio and shifting into an all-EV future, and I think that innovation is going to continue to spur innovation.
How are you guaranteeing that your partners are sourcing their materials responsibly? Are you independently verifying the responsibility of their sourcing practices?
Earlier this year, GM issued an ESG pledge to our suppliers, which includes both human rights protections and fair operating practices, as well as our suppliers’ own carbon neutral goals. As we progress with our carbon neutral goals, we're looking for our suppliers to be there with us as well. [Editor’s note: GM has committed to invest $35 billion in its transition to selling only EVs by 2035, and is aiming for carbon neutrality by 2040.] This pledge asked our suppliers to set their own carbon neutrality commitments, as well as their participation and a minimum score with ESG ratings platform EcoVadis to really demonstrate their attention to everything from ensuring employee health and safety to avoiding corruption or forced labor. If any violations of those commitments came to light, they would be addressed immediately, no question.
We're really comfortable and confident in our supply chain and what we've already been able to secure for the portfolio in the near future, and coupled with our ESG pledge from our suppliers, we’re really confident in what that future looks like.
One other important piece of the puzzle when it comes to the transition to EVs is charging. Is having an open network a part of GM’s strategy?
This is an area where I feel that GM has really made a significant investment. We believe strongly in ubiquitous charging. One main pillar of equitable climate action is infrastructure access and that there aren’t charging deserts in communities that are disproportionately affected by climate change. Our partnership with Pilot and Flying J will accelerate the expansion of charging infrastructure and enable long-distance electric travel via a network of 2,000 chargers.
I’m also really excited about our partnership with our own dealers. They are extremely integrated into their communities. Over 90% of the population in the U.S. is no more than 5 to 10 miles from a GM dealership. So we've committed to install 30,000 charging outlets and to allow the dealers themselves to decide where they should be in their communities. So that may be a local community center or maybe it’s a collection of 10 soccer fields. We want to make sure that charging is available for everybody.