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Mary Barra’s ‘Long Game’: Winning the E.V. Race

WARREN, Mich. — General Motors made a splash last year when it announced a bold plan to ramp up sales of electric vehicles and said it would stop making gasoline-powered vehicles by 2035.

But more than a year later, some other automakers appear better positioned to lead the industry’s transition to E.V.s. Tesla had global sales of more than 310,000 electric cars in the first quarter of this year, while G.M. is far behind unless it counts E.V.s made by its Chinese joint ventures. It sold fewer than 500 E.V.s in the United States in the quarter. Ford Motor has just started production of an electric F-150 pickup truck and has taken customer reservations for more than 200,000 of them.

Yet, G.M.’s chief executive, Mary T. Barra, is unconcerned. In her view, the G.M. strategy should enable the company to make more affordable E.V.s than most competitors, and eventually to win over many of the tens of millions of mainstream car buyers who are not yet shopping for electric vehicles.

Last year E.V.s accounted for about 3 percent of the 15 million cars and trucks sold in the United States. As that percentage grows, G.M. expects this cost advantage to allow it to overtake most of its rivals within a few years and to challenge Tesla for the lead in E.V. sales before the end of the decade.

“That’s the long game we are playing,” Ms. Barra said in an interview at G.M.’s sprawling technical center in Warren, north of Detroit. “And I’m here to win.”

The heart of the strategy is a battery pack design that G.M. has engineered over the last five years. Its packs, marketed under the name Ultium, are made up of Lego-like battery modules that can be combined in different sizes and used in any G.M. vehicle, from a compact car to a full-size pickup. Since the modules all use the same parts, G.M. believes it will reap great economies of scale that will drive down its costs and give it an advantage over other automakers.

While working on its Ultium design, G.M. also started building four factories with a partner, LG Electric, to churn out battery packs in mass quantities and at lower costs. It has also started retooling assembly plants to make vehicles with Ultium packs.

A Critical Year for Electric Vehicles

As the overall auto market stagnates, the popularity of battery-powered cars is soaring worldwide.

  • Going Mainstream: In December, Europeans for the first time bought more electric cars than diesels, once the most popular option.
  • Turning Point: Electric vehicles still account for a small slice of the market, but this year, their march could become unstoppable. Here’s why.
  • A Hurdle to Broad Adoption: The misperception that electric vehicles are unsafe may not be easily overcome.
  • Tesla’s Success: A superior command of technology and its own supply chain allowed the company to bypass an industrywide crisis.

Ms. Barra noted that most E.V.s sold in the United States last year were luxury models purchased by people who owned at least two vehicles. G.M.’s current offerings are of that type. They include an electric GMC Hummer pickup that sells for about $110,000 and a luxury sport-utility vehicle, the Cadillac Lyriq.

“If you want E.V.s to get to 100 percent or even 50 percent of the market, there have to be affordable E.V.s,” she said. “You’ve got to provide entry models in that space.”

Sam Abuelsamid, an analyst at Guidehouse Insights, said G.M.’s strategy should “in theory” yield cost advantages over time, but said it was unclear how significant they would be and how long G.M. would have an edge.

“Right now seems to be the moment we customers are taking an interest in electric trucks,” he said. “By the time the Silverado is out in volume, Ford will probably have sold more than 100,000 Lightnings.”

G.M. has a lot of ground to make up. Tesla has been assembling its own battery packs for years and has achieved significant economies of scale. Ford took a quicker route to get its electric truck, the F-150 Lightning, into production. It buys the truck’s battery packs from a supplier, SKI, and puts them into a modified version of the gasoline-powered F-150. By moving quickly, Ford essentially has the electric pickup market to itself for now.

Ford is also working on its own modular battery design, dedicated E.V.s (that is, not re-engineered internal-combustion vehicles) and battery plants, and is lagging G.M. on that front. Ford has made plans to build two battery plants in Kentucky and one in Tennessee, but it won’t start production for about two years. And before it can start making E.V.s with those batteries, it will have to retool assembly plants to produce them.

“It gets expensive in terms of capital every time you retool plants,” said G.M.’s president, Mark Reuss.

The first of four battery plants that G.M. and LG are building together, in Lordstown, Ohio, is supposed to start producing Ultium packs later this year. Packs made there will be used in three Chevrolet E.V.s coming out next year that G.M. is counting on to become brisk sellers — a Silverado pickup, and the Equinox and Blazer sport-utility vehicles.

G.M.’s three other battery plants are supposed to start production in 2023, 2024, and 2025. Those plants will help equip more than a dozen E.V.s that the company plans to add to the U.S. market. Its goal is to produce more than one million E.V.s. in North America annually by 2026.

The heart of G.M.’s electric vehicle strategy is a battery pack design that the company has engineered over the last five years.Credit…Peter Hoffman for The New York Times

The daughter of a G.M. die maker, Ms. Barra, 60, grew up in Royal Oak, Mich., and started working at a G.M. plant as an intern at 18 while studying electrical engineering at the company’s technical college, now called Kettering University. Through a G.M. fellowship, she earned a master’s in business administration at Stanford. Since entering the management ranks, she has held top posts in global manufacturing, human resources, product development and supply chain management.

In January 2014, she succeeded Daniel F. Akerson as chief executive and became the first woman to head a major auto company. Ms. Barra guided G.M. through a scandal stemming from an ignition-switch flaw linked to crashes that resulted in more than 100 deaths. She then made a series of decisions that showed that the General Motors that had recently emerged from bankruptcy was not the conservative, lumbering giant that consumers and investors had known for a century.

In a move that would once have been unthinkable, she decided to pull out of the European market, a region of slow growth and low margins where G.M. had been posting losses for two decades. G.M. sold its European operations to France’s Peugeot S.A., now part of Stellantis. Included in the sale was the Opel division, which had been owned by G.M. since 1929.

Shedding money-losing businesses that had been tolerated for years “helped change the whole mind-set,” she said. “The whole company kind of went, ‘Well, this is a new day.’”

G.M., which had long taken pride in developing its own technology, also acquired an automated vehicle start-up, Cruise Automation. In another precedent-breaking move, G.M. has brought in outside investors, including Honda and T. Rowe Price, to share the costs and risks of spending billions of dollars on self-driving vehicles.

Along the way, Ms. Barra formed a close partnership with Mr. Reuss, a contemporary who had been a candidate for the top job in 2014. He, too, has spent his career at G.M. and had followed his own father, Lloyd Reuss, a former president of the company.

While Ms. Barra was heading product development and Mr. Reuss was in charge of North America, they resolved to break away from the company’s reputation of making subpar cars. “We made a pact,” Mr. Barra recalled. “We said we are not going to do crappy vehicles. If we launch a vehicle, we want it to win.”

In the years Ms. Barra has been chief executive, she and Mr. Reuss have grown into a tandem. He heads product development and added the title of president in 2019. Last fall, when G.M. gathered investors and analysts to lay out a vision of doubling revenue to around $280 billion a year, the daylong conference was jointly led by Ms. Barra and Mr. Reuss.

Their thinking about quality came into play when G.M. started mapping out its long-term E.V. strategy. In late 2016 the Chevrolet Bolt hit the market. A small car with limited interior space and a battery range of 238 miles, well short of the range most Teslas offered at the time, it achieved only modest sales.

Because of a defect in battery packs made by LG, all 141,000 Bolts sold in the United States from 2017 to 2021 were recalled to have their packs replaced. The recall forced G.M. to stop making Bolts last fall. Production restarted last month.

To ensure that a second wave of E.V.s could generate profits and reach volume sales, Ms. Barra’s executive team concluded that the company could not make compromises as it did with the Bolt. Their aim was for the company to build E.V.s from the ground up, find cost reductions and manufacture the battery packs itself. G.M. has estimated that the Ultium design will cut the cost of battery packs by 30 percent.

With G.M.’s E.V. strategy well underway, Ms. Barra is confident that the company has chosen the right path, and her biggest concern is executing it as quickly as possible. “I drive the organization crazy because I’m constantly challenging the organization on how can we go faster,” she said. “Every time I go to design and see a vehicle they’re working on, I’m like, ‘How fast can we get that out?’”

And if her team needs a reminder of the urgency of the matter, the recent fanfare generated by Ford as the F-150 Lightning went into production does the job nicely.

“Do I wish the electric Silverado launch was coming sooner?” Ms. Barra said. “Sure.”

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