Bloomberg Businessweek - USA (2020-12-21)

◼ BUSINESS Bloomberg Businessweek December 21, 2020

12

process,andthe simplicity ofbattery-centric

vehicles compared with internal-combustion

engines’ mass of specialized engine combinations

andfuelandexhaustsystems.Designersstarted

workthedayafterthat.Fewerpersonneland

prototypes reduced costs, too. The program’s prog-

resssofarhasledGMtomaketheHummer’sexpe-

ditedtimeframea modelforallfutureEVs.“We

wanttodoepicshit,”Tavelsays.“Weputourtiming

planinthecompany’s global plan. I expect this to

be applied across the board.”

Seventeen-year-old Tesla is also developing

models faster, with four distinct ones for sale and

more coming. The carmaker was able to roll out

its Model Y crossover SUV in March in far less time

than it took to develop its mainstay Model 3 sedan

because they share the same battery pack and

underpinnings. Tesla’s first pickup, the Cybertruck,

which is also expected to hit the market in late 2021,

will go head-to-head with the new Hummer.

EVs are more expensive to manufacture, mainly

because of the cost of batteries, and most current

modelslosemoney.GMsaysitsfutureEVswillturn

a profit,butmajorautomakersstillrelyoncashflow

fromtheirgasoline-poweredvehicles to finance

their transitions to an EV future. Meanwhile, most

of all-electric Tesla’s quarterly profits comes not

from cars, but from the sale of clean energy credits

to rivals that are out of compliance with emissions

standards. Tesla is relying on improved manufac-

turing and lower-cost battery chemistry to drive

its costs down.

Electric cars’ so-called skateboard architec-

ture uses a standard chassis that allows auto-

makers to develop new vehicles with fewer scale

models fashioned out of clay or steel parts. Heavy

EVsAreHeadingforthe PassingLane

368k

218

150

131

130

127

105

78

61

58

Tesla

BYD

BAIC

SAIC

BMW

Geely Group

Volkswagen

Nissan

General Motors

Hyundai

Electric vehicle sales in 2019

100%

50

0

Shareofpassengervehicle sales

Internalcombustion

Electric

2015 2040

Projected

DATA: BLOOMBERGNEF

asked chief engineer Josh Tavel how much time

it would take to get the electric Hummer out the

door. The usual four years, he responded. That was

big carmakers’ age-old gestation period for getting

a new model from a designer’s sketch pad to dealer

showrooms.Butit wouldn’tdoforBarra,who’s

decidedtomakebatterypowerthecoreofthe

company’s strategy. “I’m thinking 2021,” she said.

Thus began what could mark the genesis of the

most transformative makeover of GM since legend-

ary Chairman Alfred P. Sloan concocted the idea of

differently priced car brands to suit different types

ofbuyers.AndthefactthatGMis ontracktobegin

deliveriesoftheHummerEVtrucknextfall—barely

30 monthsafterthatfatefulmeeting—shows just how

determinedthecompanyis tochangeitself.

The giant automaker plans to push out

30 electricvehiclemodels by 2025 totake on

market leader Tesla Inc., starting with the two most

iconic brands at the top of its roster, Cadillac and

Hummer.GMis spending$27billioninanall-out

efforttoremake40%ofitslineupandretoolone-

thirdofitsU.S.vehicleassemblyfactories,putting

it ona one-waypathtoelectrification.

When Tavel agreed to Barra’s ambitious

schedule for the Hummer project’s completion, he

wasn’t sure how they could pull it off. But speed is

critical in the era of the ampere. Tesla is aggres-

sively building more production around the globe,

and President-elect Joe Biden and other political

leaders elsewhere are pushing more EV-friendly

government policies that will help plug-ins sell.

Like Tesla CEO Elon Musk, Barra has an advan-

tage overrivals such asFord Motor Co.and

VolkswagenAG: plentifulsupplies ofits own

batteries.Co-developedwithpartnerLGChem

Ltd.,themuch-ballyhooednext-generationUltium

lithium-ion batteries are uniquely flexible, GM says,

because the large-format, pouch-style cells can be

stacked inside the battery pack, allowing engineers

to use the same power-storing chassis to design a

wide variety of vehicles. GM is also boasting that

trucks will go 450 miles before needing a recharge.

ThatflexibilitywillallowGMtodesigncarsaround

just 19 differentbatteryanddriveunitconfigura-

tions,comparedwith 550 internalcombustion pow-

ertrain combinations available today. The electric

Hummer truck will be the first vehicle to sport the

new power plant, with Cadillac’s planned Lyriq lux-

ury crossover coming next.

To meet Barra’s ambitious delivery schedule for

the Hummer truck, Tavel and Doug Parks, GM’s

product development chief, met the next day to

put together a small team that relied on virtual

engineering tools, a streamlined internal approval