48
growth of Uber Technologies Inc. and began to wonder how
it could handle that kind of threat. Add in the work Google
was doing with self-driving technology (before it renamed its
self-driving business Waymo), and it was clear GM had to move
on both fronts or risk missing the biggest possible change in
personal transportation since the automobile itself. In January
2016, GM invested $500 million in Lyft Inc., Uber’s smaller rival,
with the intent of marrying GM’s self-driving technology with
the ride-hailing brand. GM was also concerned that its driver-
less development was lagging those of some Silicon Valley
startups. One was Cruise Automation, founded by Kyle Vogt,
who’d previously sold gaming website Twitch Interactive Inc.
for $1.1 billion. Cruise was retrofitting cars, including Vogt’s
Audi A4, with a self-driving system the company planned to
peddle as an aftermarket product.
During test drives, GM’s own driverless vehicles were hav-
ing difficulty avoiding parked cars and making left turns against
oncoming traffic, problems the company thought Cruise could
help solve. “The tech team saw that Cruise could move more
quickly than GM could,” says Alisyn Malek, who
worked then for GM’s internal venture fund and
has since co-founded a self-driving technology
startup called May Mobility. In courting Cruise,
GM dangled, in addition to the $1.5 billion invest-
ment, the Chevy Bolt, an electric vehicle with
loads of onboard power to run computers. And,
crucially, GM had the factories to churn out hun-
dreds of thousands of cars. If Vogt and his inves-
tors wanted to see their technology actually
change American car culture, GM told them, this
was their best shot.
The other piece of Barra’s transformation was
going electric. GM designers came up with 18 dif-
ferent prototype vehicles using the carmaker’s
next-generation battery pack. They included
sedans, crossover SUVs, sports cars, and auton-
omous vehicles for ride-sharing, all built on
the same platform. Barra, Ammann, and Mark
Reuss, then product development head and now
Ammann’s successor as GM president, inspected
the vehicles under the company’s brightly lit
metallic dome at the engineering center in
September 2017. All the vehicles were built atop a
frame that housed a flat battery pack in the floor.
“The purpose,” says chief designer Mike
Simcoe, “was to show that we could reuse the
electric vehicle architecture and make vehicles
that run the gamut.” Building a variety of model
types on the same platform would greatly lower
the costs of producing a full line of EVs and give
GM a crack at what’s eluded Tesla: a profitablebusiness in electric cars. Reuss expects to sell a million EVs
a year globally and make money on them. They won’t gen-
erate gas-engine-size margins at first, but eventually they
will, he says.
At the tech center, Reuss goes to a whiteboard. He draws a
line inclined upward at a 45-degree angle, signifying how GM
will pay more and more over time to make compliant gas burn-
ers as fuel-economy and other regulations become more strin-
gent and the company begins to run out of low-priced ways
to make cars lighter and engines more efficient. Reuss then
draws a line that plunges downward through the first, repre-
senting the projected decline in the cost of electrics. EV bat-
tery packs once cost more than $1,000 per kilowatt-hour of
energy. That’s dropped to $150 to $200 per kWh, according to
McKinsey. Reuss says that when the number gets below $100
per kWh, GM can make an EV profitably. That’s also when
electric cars get competitive in price with conventional cars.
When Reuss made a similar presentation to Barra, her
takeaway was that GM eventually could make money on EVs
without charging $50,000 or more like Tesla.
Rather than hope regulators go easier on carmak-
ers or wait for consumers to fall in love with the
electric drive, Reuss says, GM decided to push its
way into the still-tiny market for battery-powered
cars, betting that it could make them appealing
and profitable. In October 2017 he announced
GM would be selling 20 all-electric models by- More than half are targeted at China, where
government incentives make EVs an easier sell.
Reuss is so sold on the electric drive, he’s mov-
ing to develop electric trucks. (GM was close to
investing in startup Rivian Automotive, which
plans to sell electric pickups and SUVs in 2020,
but the deal fell apart and GM went back to
designing its own vehicles.) The company has
also toyed with the idea of an electric Hummer,
though an electrified Cadillac or GMC SUV seems
more likely. Powering any of those tried-and-true
Detroit behemoths with batteries would be about
as big a turnabout as GM could make.
As GM lays off old-line engineers, Reuss is hir-
ing coders, software and artificial intelligence
engineers, and people skilled in battery chemis-
try. Instead of using contractors to develop auto
infotainment and cybersecurity, GM is bringing
the work in-house. At Cruise, Ammann will dou-
ble staff, to 2,000 people, and almost none, he
says, will be from GM. The Cruise website shows
more than 300 openings, with the largest num-
ber in software engineering. GM will continue to
hire traditional automotive engineers, says Brian
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