Classic car manufacturers continue to show the difficulties they encounter in the face of the energy transition.
Mary Barra CEO of General Motors, has recently admitted that it is currently very difficult to make a profit by selling electric vehicles. Without a filter, she bluntly admitted that Tesla surpasses all manufacturers in this regard. She then confessed that GM faces several challenges to catch up with Elon Musk’s business.
A ship that is difficult to turn around
It was while giving a talk at Sanford Bernstein that Ms. Barra opened up about the challenges facing her business. According to her, General Motors will not be able to be profitable by selling electric vehicles costing between $30,000 and $40,000 (US) before the beginning of the next decade.
“The procurement cost for building affordable electric vehicles, which are in the $30-40,000 price range, is still way too high. These vehicles will only equal their thermal counterparts towards the end of this decade. She said during the conference.
She then gave her frank opinion about Tesla which, since the beginning of the year, has lowered its prices and accelerated deliveries. According to Ms. Barra, Tesla is currently the manufacturer to beat in terms of technology, profitability and mass production for electric vehicles.
“This advance is not permanent. We will catch up with them and even overtake them, but it will take us longer. She added.
Conclusion
This rhetoric has become all too common with major automakers. At least Mary Barra is realistic and transparent and not afraid to admit that Tesla is grabbing significant market share. Unfortunately, some automakers are still playing in the ostrich by completely ignoring the havoc Tesla is wreaking on the industry.
It’s obvious that big liners like GM have a few lessons to learn from this builder who, just 10 years ago, was just a tiny start-up company. If Tesla is so far ahead, it’s because it doesn’t function as a generalist manufacturer that has to deal with a whole history of factories, parts suppliers, unions and retirement plans. Imagine having to support his entire past at the same time as having to invest massively to transform his business. The costs are staggering.
Everything remains curious to hear, however, because General Motors has set up the Ultium architecture precisely with the aim of creating economies of scale.
