General Motors Company (NYSE:GM) is one of the traditional automotive manufacturers in the U.S and across the globe that have plans to produce electric vehicles in the future. However, that plan may take more than a few years to bring to fruition.
GM plans to take on Tesla Inc (NASDAQ: TSLA), which is the leading global electric car manufacturer. GM had previously announced plans to switch from producing vehicles powered by internal combustion and instead focus on producing electric cars by 2023. However, the company will likely not hit that target, and the electrification plan will take a few more years to achieve.
GM has to overcome some challenges to achieve the electrification goal. First, it has to set up production facilities that specialize in the production of electric vehicles. The second major hurdle is that it has to source enough batteries to facilitate mass production. Electrification seems to be the next logical step for many companies, especially with regulatory pressure weighing in on emission standards.
“We believe the transition will happen over time,” stated Mary Barra, the CEO of General Motors, indicating a likelihood that the company anticipates a slow transition.
GM’s ongoing electric vehicle plans
Even though GM is not on track for full electrification by 2023, the company is taking the necessary steps to ensure that it gets there. For example, GM has commenced site preparation for its $2.3 billion battery production facility in Ohio. The company teamed up with LG Chem, a South Korean battery manufacturer, to pursue the production of powerful Ultium batteries, which will be fitted into GM’s electric car fleet in the future.
GM has also shut down some of its vehicle manufacturing facilities in preparation for the shift to electric car production. It also cuts down on the production of internal combustion vehicles. Recent reports also revealed that GM is working on an electric delivery van that will mainly target business customers. The company has not officially confirmed the report, but sources say that the van will commence mass production by the end of next year.