Cadillac already had a $20 billion plan to go all-electric by 2030. That’s not enough, apparently, and things are going faster. All that and more in The Morning Shift for November 18, 2020.
The simplest way to put this is that GM’s high-visibility EV plans have gotten a very lukewarm reception, largely because they’re all still years away. That’s true of the Cadillac Lyriq and the Hummer EV.
Reuters reports that GM is moving the marque to an accelerated electrification plan:
GM CEO Mary Barra, who is scheduled to speak at a conference hosted by Barclays, is expected to say the automaker is ready to spend more on electric models by 2025 than the $20 billion previously outlined, the sources said.
Supplier sources said previous plans to make the Cadillac brand all electric by 2030 are being sped up, possibly to 2025, and other sources said that acceleration will be repeated in other brands and in segments such as commercial vans.
Lyriq is slated to go into production in late 2022, but GM officials have been stung by criticism the automaker was bringing the vehicle to market too late, one source said.
“The pull-ahead in programs is real and the organization is really doubling down on speeding up product development,” the source said.
If Cadillac was a plane, it’d be dumping all fuel and rocketing towards a touchdown at an emergency EV airstrip.
I’m sorry, I just love a fuel dumping metaphor.
I know you’ve heard this one before. GM takes government money, then blames its own workers for making its business untenable. This isn’t the Great Recession again, though, it’s news for GM Korea, as Reuters reports:
General Motors has issued its strongest warning yet that persistent industrial unrest could drive it out of South Korea, just two years after it received a state-backed rescue package to stay.
GM workers have been staging two, four-hour strikes daily since Oct. 30 as they demand an end to a wage freeze put in place after the 2018 deal that saved the Korean operations from bankruptcy.
Faced with low production rates and poor sales, GM agreed on a rescue package worth $7.15 billion, including $750 million from KDB in 2018. Under the terms of the binding deal, GM cannot exit its investment in the country for 10 years.
Workers have complained that executives have been getting bonuses while their wages have been frozen. Not great!
I feel like it was just yesterday that we were reporting that Volkswagen was saying the auto sector needed no stimulus. Guess not! The auto-political machine in Germany wants money, as Bloomberg reports:
Carmakers and parts suppliers in the country, which employ nearly 800,000 Germans, were spending heavily on electric cars. That left companies exposed to the sudden drop in demand from the fallout of the coronavirus – auto production plunged 97% in April and has yet to recover to pre-pandemic levels.
Chancellor Angela Merkel will host a meeting with senior auto executives on Tuesday to hash out a way to give the sector a helping hand in the transition to the electric era. Proposals on the table include an extension of cash bonuses for purchasing electric-powered vehicles beyond 2021 and expanding the country’s spotty charging network. The package to subsidize the development and production of climate-friendly cars could total an additional 1 billion euros ($1.2 billion), Reuters reported.
Merkel’s allies in Bavaria – the home of BMW and Volkswagen’s Audi as well as parts maker Schaeffler AG often lobbies on behalf of the auto industry – wants a cash-for-clunkers plan to renew the fleet of trucks, as well as a state-subsidized synthetic fuel research program.
Speaking of the strange reach of the central European auto industry, Bloomberg is happy to report that luxury SUV sales in China and the United States are keeping things churning and burning in eastern Europe. Please enjoy these pieces from the story that are not alarming in any way:
Slovakia and the Czech Republic, which make the most cars in the world per capita, have closed shops and bars to try to control the second wave of COVID-19 infections engulfing Europe.
Their factories, however, continue to produce luxury vehicles including Porsche Cayenne SUVs for Asia and the U.S., as well as an array of lower-cost models from automakers including PSA Group and Skoda for customers closer to home on tighter budgets amid the pandemic.
“China, the U.S. and the UK are very big markets for us,” Leslie said in an interview. “We continue to see good trends there.”
Automotive investment has helped transform the former Eastern Bloc. Lured by a cheap but skilled workforce and proximity to major European markets, large producers that also include Hyundai and Kia have built state-of-the-art assembly lines across the region, which is also home to a web of suppliers.
But it’s Slovakia and the Czech Republic that stand out. The auto sector generates about half of industrial output in the former country and roughly a quarter of output in the latter. That is more than in Germany or France.
Basing half of your economy on foreign appetite for gas-guzzling luxobarges? It’s an economic model that’s never gone wrong before!
This one is a little hard to parse. Over the weekend we first heard that the UK planned to move up its ban on fuel-burning car sales from 2040 to 2035 to 2030. Boris Johnson just made that official, part of a £12bn greenification plan. That’s a lot of money! Wait, no, that’s not a ton of money, particularly in the case of electric cars, as the BBC reports:
New cars and vans powered wholly by petrol and diesel will not be sold in the UK from 2030, Prime Minister Boris Johnson has said.But some hybrids would still be allowed, he confirmed.It is part of what Mr Johnson calls a “green industrial revolution” to tackle climate change and create jobs in industries such as nuclear energy.Critics say the £4bn allocated to implement the 10-point plan is far too small for the scale of the challenge.The total amount of new money announced in the package is a 25th of the projected £100bn cost of high-speed rail, HS2.
The exact figures of the EV development are a little hazy, as Boris himself claimed the Uk would put £2.8bn to EVs, but the Financial Times points out that this isn’t all new:
That will be supported by more than £2.8bn for electric vehicle charge points and grants for low-emission vehicles and the development of car batteries — although over half that money had been announced before.
I see that Chevrolet is not going all-electric. I suppose we’re all just supposed to let the world burn, hm?