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GM’s all-electric announcement headlines auto industry’s growing commitment to EVs

29 January 2021 Kevin Adler

The announcement by General Motors on 28 January of the intention to sell only electric versions of its light-duty vehicles by 2035 is the most prominent EV announcement during a busy two weeks for the world's major automakers.

In addition to GM's light-duty pledge, the company had announced on 19 January that it will retool an assembly plant in Canada to produce electric commercial delivery vans. Nissan announced on 28 January that all new models will be EVs "in key markets by the early 2030s." Stellantis, which owns Fiat Chrysler and Europe-centric brands such as Peugeot, Opel, and Vauxhall, said on 29 January it will debut 10 EV and hybrid models by 2025. Ford also announced this week it will produce its first EV in China this year, the Mustang. Volvo said it will triple its European EV production this year, and it said in early January its goal is to be selling 50% EVs and 50% hybrids by 2025.

The automakers' announcements coincided with President Joe Biden saying he intends to redirect future US fleet vehicle purchases to only EVs, as part of a "Buy America" executive order. This could result in more than 650,000 light-duty vehicles and trucks going electric over a number of years.

GM takes the lead

GM became the first of the traditional US automakers to set the lofty goal of all EVs, and in a statement on 28 January, CEO Mary Barra linked it to her earlier pledge that the company is aiming for company-wide carbon neutrality by 2040. That pledge includes elimination of greenhouse gas emis­sions from fuel burned by its heavier-duty vehicles. The 2040 deadline advances by five years a previously announced goal for net-zero carbon emissions.

"Earlier this month at [Consumer Electronics Show], I announced General Motors' intention to lead an equitable and inclusive transition to a net-zero carbon future," Barra said. "In support of that statement, I shared details of our plans to introduce 30 new electric vehicles by 2025 and spend $27 billion as part of a commitment to put everybody in an EV."

GM will provide EV options across its full line of models and price points, Barra added.

Along with vehicle production, Barra said GM will take an active role in building out the charging infrastructure needed to keep all those EVs running. The company is working with charg­ing developer EVgo to add more than 2,700 new EV fast chargers to its network by 2025—all of which will be powered by renewable energy.

Charging infrastructure is a key element to the successful rollout of EVs for GM and other automakers in the US. The newly formed Zero Emission Transporta­tion Association, which includes electric utilities, battery makers and supply chain companies, automakers, and EV charging installation companies, proposed major investments in EV charging in its "Roadmap to 2030 Policy Platform." The group praised Biden on 28 January for "leading by example, sending a strong market, and policy signal while catalyzing the transportation electrification sector and advancing the critical secondary market for EVs."

California, where a plan to end sales of internal combustion engine light-duty vehicles in place, has an immense challenge in building the charging infrastructure it needs, according to a recently released California Energy Commission analysis (see IHS Markit article).

Reaction to GM announcement

GM's announcement drew praise from the Environmental Defense Fund (EDF). "With this extraordinary step forward, GM is making it crystal clear that taking action to eliminate pollution from all new light-duty vehicles by 2035 is an essential element of any automaker's business plan," said EDF President Fred Krupp in a statement.

But the goal is "aspirational," GM acknowledged, and Stephanie Brinley, IHS Markit principal automotive analyst, said that the limits of the promise should be kept in mind. "Whether GM meets that specific target or not, setting it has the effect of providing a clear goal for the organization to work towards…. Although the targets are aggressive ones, GM's announcements over the past year provide credibility that the company may achieve them," she wrote in an analysis.

Over the past 12 to 24 months, GM had made numerous announcements on development of the batteries and fast chargers, as well as new electric models such as the GMC Hummer EV pick-up and Cadillac Lyriq, according to Brinley. "GM has also continued its development of and investment in fuel cell EVs, even though most of its announcements more recently have highlighted the company's battery EV work and this latest statement focused on battery EVs," she wrote.

As an example of GM's ongoing commitment in the EV space, the company announced on 19 January that it had signed a new union contract ahead of spending C$1 billion (US$785 million) to retool its CAMI assembly plant in Ontario, Canada, to produce its recently unveiled electric-powered commercial delivery vans. GM said it would begin work immediately to retool the CAMI plant for assembly of the BrightDrop EV600 vehicle, with FedEx Corp. to receive the first vehicles by the end of 2021.

Nissan targeting key markets

Nissan said it will target the US, Japan, China, and Europe for its EVs.

"We're determined to help create a carbon neutral society and accelerate the global effort against climate change," Nissan CEO Makoto Uchida said in a statement. "Our offering in electrified vehicles will continue to expand around the world, and this will make a major contribution to Nissan becoming carbon neutral."

As of the end of 2020, Nissan said it had sold more than 500,000 Leaf vehicles, which became the first mass-market EV in 2009.

Nissan has pledged to achieve carbon neutrality across its operations and through the life cycles of its products by 2050. Like GM, Nissan will pursue electrification of its manufacturing process, Uchida said, as well as investing in improving vehicle battery technology.

Includes reporting by Steve Cronin and Jeremy Rakes for OPIS.

Posted 29 January 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

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