GM on Wednesday revealed its intentions to take on Tesla in the battle to sell the next generation of electric vehicles, bringing the size and consumer credibility of a Big 3 giant to the race for what analysts say may be the future of cars.
In doing so, the Detroit icon will have to unseat Elon Musk's Tesla, which has quickly become the undisputed leader in electric vehicles.
"GM, given its vast distribution and global customer base, must be taken seriously in this EV arms race," Wedbush analyst Daniel Ives wrote in a note after GM held its "EV Day" to show off 11 future vehicles it hopes will solidify as the main challenger to California-based Tesla.
20 New EVs
In total, GM said it will have 20 electric vehicles for sale by 2023 and is shooting to sell 1 million of them a year in the United States and China within five years. It will put more than $3 billion a year into EV research between now and 2025.
This is the future of the company, said GM CEO Mary Barra.
"GM is building toward an all-electric future because we believe climate change is real," Barra said during the presentation. "We want to put everyone in an EV, and we have what it takes to do it."
Among the vehicles GM will sell as all electrics are the new Hummer, and a new version of the Chevy Bolt that will launch this year. GM also will unveil the Cadillac Lyriq electric SUV next month.
Inflection Point Coming?
Ives noted GM's success on electric vehicles to date has been "tepid," but that the time is now right for the legacy automaker to make this move. While the EV market currently represents only about 2% of cars sold in the U.S., the analyst expects that could be closer to 8% by 2025.
"We believe the stage is set for EV demand to inflect," Ives wrote. GM's EV Day "was a clear shot across the bow against Musk and Tesla, which continue to lead the EV landscape by a clear margin."
Batteries A Game-Changer
Part of what could allow GM to gain traction on EVs is its new battery cells, which the company says can power a car for more than 400 miles on a single charge, giving it a slightly longer range than Tesla's vehicles. Tesla's Model S has a version that can go 390 miles on a charge. The new battery cells will be used in several of its new EVs, including its upcoming self-driving EV, the Cruise Origin.
GM also said it will add 3,500 new EV charging plugs throughout its U.S. and Canadian facilities, tripling the number of charging locations the company currently provides. The push to be a viable EV competitor also will be good for GM's workforce. The company said it will add 400 workers at its Orion factory, where it builds the electric Chevrolet Bolt, among other vehicles.
Tesla Undisputed Leader
For now, Tesla is the leading electric vehicle maker in the world, and made 90% of the EVs sold in the U.S. last year. It plans a Battery and Powertrain Investor Day in the coming weeks.
GM's bullishness on electrics wasn't charging up investors, who were pushing GM stock down. GM shares were off just under 2% Thursday morning at $30.54. Tesla shares were also down, nearly 3%, trading at $727.60.
General Motors Chairman and CEO Mary Barra addresses the gathering, March 4, 2020 at an event detailing GM's electric vehicle technologies and upcoming products in the Design Dome on the GM Tech Center campus in Warren, Michigan. (Photo by Steve Fecht for General Motors)