Gasoline models are GM's hedge for sales, share in electric transition

DETROIT — After bold, public commitments to electrification, General Motors is entering a lengthy and uncertain transition period.

The century-old automaker soon will begin selling the wave of electric vehicles it has championed over the past two years.

Through mid-decade, GM will have launched three electric pickups, at least two electric SUVs and a handful of electric crossovers, if all goes according to plan. The automaker could lose sales and market share as it aims for an all-electric light-vehicle lineup by 2035, but it intends to protect its most lucrative segments: full-size pickups and SUVs. Electric versions of the Chevrolet Silverado and GMC Sierra are slated to launch in 2023, along with an electric Cadillac Escalade in 2024, but they'll exist alongside their gasoline-powered counterparts for the foreseeable future.

"They're aggressive down this path, but there are still some gas-powered vehicles to work with," said Stephanie Brinley, principal analyst at IHS Markit. "I don't know how GM will be able to actually make this transition without seeing at some point a bit of a volume drop that might be recovered when EVs are stronger."

GM has set aside $35 billion — the majority of its new-product investment — for electric and autonomous vehicle development through 2025.

Today, the automaker has only two EVs — the Bolt hatchback and crossover — in the North American market, compared with nearly 30 internal combustion nameplates.

Within five years, GM envisions a portfolio of at least 20 EVs in North America, with about 20 gasoline-powered nameplates expected to remain in the lineup.

Some existing vehicles, such as the Chevy Malibu and Camaro, won't stick to the standard cadence of face-lifts and redesigns. Instead, they'll ride out the current generation before making way for EVs.

GM's target to electrify its entire light-vehicle lineup by 2035 will also transform its manufacturing footprint. The automaker has announced plans to build Ultium-powered vehicles at Factory Zero in Detroit, Spring Hill Assembly in Tennessee, Ramos Arizpe Assembly in Mexico and CAMI in Ingersoll, Ontario.

Meanwhile, the future of Fairfax Assembly in Kansas and Orion Assembly in Michigan could be in jeopardy. Fairfax, which builds the Chevy Malibu and Cadillac XT4, has been idled since Feb. 8 because of the global microchip shortage. Production of the Malibu and XT4 is slated to end by 2025.

Orion is the only GM plant churning out EVs today. But production of the Bolt EV and Bolt EUV, which use the automaker's previous-generation electric architecture, is expected to end by 2024.

Neither plant has products assigned beyond 2025, one forecaster said. Their fate likely will be determined by the next UAW labor contract, set to be negotiated in 2023.

GM has made a full-throated commitment to electrification, but it's not alone in the space. As the automaker introduces EVs in new segments, it will face competition from other automakers planning to launch similar vehicles first or around the same time. The Ford F-150 Lightning, for example, could be on the market a year before forecasters expect the electric Silverado to go on sale.

"Everyone is on track to be at similar stages as far as range and vehicle sizes that they offer," said Paul Waatti, industry analyst at AutoPacific. "While [GM] is well positioned, I do think there is going to be a lot of competition in the mix that will be very similar."

GM also could initially lose volume by electrifying portions of its lineup — Cadillac's crossovers, for example — without keeping a gasoline-powered alternative for consumers who don't yet want an EV, analysts say.

"Depending on how aggressive they go with this … it appears at least to some extent that they are willing to sacrifice the near-term [volume] for the long-term gain," said Jeff Schuster, president of global forecasting at LMC Automotive.

Still, GM North America President Steve Carlisle has maintained that the automaker won't risk ceding share in key segments, such as full-size pickups and SUVs. "I want to be in the top one or two positions in the segments that I'm competing in," he said in May. "So what's that number and at what price and what margin stock? You've got to look at all that together."

The automaker still has more than a decade before the point when most of its internal combustion vehicles would start getting phased out, but Carlisle has emphasized that its zero-emission timeline is a goal, not a promise.

Heavy-duty pickups, for example, likely will be powered by diesel for many more years, at least until fuel cells become a reasonable replacement.

"As aggressive as they are, they're not fools, and they are building in a transition period," Brinley said. "There's a dance. There's a balance between moving to EVs and still having vehicles that do what needs to be done."