Battery Shortages Could Affect GM's EV Plans For 2025, Suggests Report

General Motors (GM) faces challenges in meeting its ambitious target of producing 1 million electric vehicles (EVs) in North America by 2025, according to a recent analysis by industry research firm AutoForecast Solutions (AFS). The slow ramp-up of GM's three U.S. battery plants could result in actual EV production falling short of 600,000 units by mid-decade.

GM's battery production plans at its facilities in Ohio, Tennessee, and Michigan may hinder the company's ability to build over half a million EVs in North America by 2025, as stated by Sam Fiorani, head of global vehicle forecasting at AFS. Fiorani highlights concerns regarding battery capacity limitations and the availability of raw materials, both of which could impact GM's projected EV volumes.

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Ultium Cells, GM's joint venture with LG Energy Solution, is responsible for manufacturing battery packs for the company's newest EVs in North America. While the joint venture has opened its first plant in Ohio, a second facility in Tennessee is scheduled to begin production in early 2024, followed by a third plant in Michigan in early 2025. Despite these developments, AFS predicts that the three battery plants will only produce around 58 GWh worth of cells, sufficient for approximately 550,000 vehicles, due to slow ramp-up schedules.

GM has emphasised its commitment to its targets, including cumulative EV production of 400,000 units from early 2022 through mid-2024. However, the company has not disclosed specific North American EV production targets for 2024 and 2025. GM spokesman Jim Cain maintains that the company's targets are still attainable, a sentiment echoed by Wedbush auto analyst Dan Ives.

While GM claims to have secured enough battery raw materials to meet its 1 million EV production goal annually in North America by 2025, challenges may arise due to potential shortages and supply chain disruptions. The company's extensive global battery materials supply chain involves partnerships and agreements with more than 20 companies. Some of these agreements may not come into effect until after 2025.

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AFS estimates that GM will produce around 76,000 EVs in North America this year and approximately 328,000 units in 2024. The discontinuation of GM's affordable EV models, the Chevrolet Bolt EV and Bolt EUV, coupled with the slow ramp-up of production for the Cadillac Lyriq and GMC Hummer EV, adds further complexity to GM's EV production plans.

GM's goal of surpassing Tesla as the leader in EV sales remains a priority. CEO Mary Barra has reiterated the company's determination to produce 1 million EVs annually in North America by 2025. However, the challenges posed by battery production, raw material availability, and the discontinuation of certain models may impede GM's ability to achieve its ambitious targets.

Source: Reuters