General Motors believes in an all-electric vehicle future, CEO and Chairman Mary Barra told Barron’s readers Thursday—and hinted at more news that could bolster the company’s alternative fuel offerings next week.
The legacy car manufacturer, founded over a century ago in Michigan, has recently been making a name for itself in the electric vehicle (EV) space—though the expansion hasn’t been without setbacks. The company earlier this week announced plans to hire 3,000 employees to work on tech initiatives involving electric and autonomous vehicle production. Earlier this year, General Motors (ticker: GM) announced partnership with electric vehicle company Nikola, which later came under scrutiny after the electric trucking start-up was the subject of a negative report from a short seller in September. Nikola denies those claims.
Barra shared information about the company’s growth opportunities and investments in the electric vehicle space during Barron’s Investing in Tech conference Thursday.
“We think there’s a huge opportunity to grow EV demand, and that’s why we’re accelerating our business,” Barra said, naming availability across price points as a key factor for growth. “We need to have vehicles not only at the top end or the luxury segments, but also that are attainable for everyone,” she said.
Consumers must also feel like EVs are as good—or better—a deal in terms of functionality, performance, and range, Barra said. “Buying a vehicle, or leasing a vehicle, is one of the most expensive purchases for most people,” the CEO said. “We need to make sure that we’re providing a vehicle for them, and an ownership experience, where there’s no compromise and it’s really all upside.”
The company’s electric vehicles could be the key to gaining market share on the coasts, said the CEO. “Our market share is stronger in the middle of the country, so, to be able to grow in areas where we aren’t getting what I’d say is our fair share, or even more—it presents a real growth opportunity for General Motors,” she said.
Barra touted the company’s joint partnership with LG Chem (051910.Korea), which in late 2019 invested more than $2 billion in battery cell development, and its investments in U.S. electric vehicle plants in cities in Ohio and Michigan historically tied to the auto industry. “From a facilities perspective, it allows us to be more efficient,” she said, highlighting the teams of employees at the plants and the similarities between electric and gas combustion vehicles outside of the engine.
General Motors is slated to give investors a deeper look into its EV plans at the Barclays 2020 World Automotive Conference on Thursday, Nov. 19, the CEO said.
While Barra hinted toward EV news on the horizon, the CEO declined to comment on the company’s partnership with Nikola. “Conversations continue and as soon as we have an update, we will share it,” Barra said when asked about Nikola.
Barra did comment on the state of the company’s dividend, which was suspended in April. “If things continue to recover, we’ll be evaluating that mid-next year,” Barra said, adding that the company will “balance what the right level is with also our strategy to accelerate EVs.” Last week, General Motors reported third-quarter earnings of $2.87 per share—soaring past Wall Street estimates of $1.38.
Email: Shaina Mishkin at email@example.com