GM seeks flexibility in EV manufacturing investments to track with demand

General Motors remains "confident" in its electric-vehicle investments but needs to stay flexible with its plans to meet changing customer demand, the automaker's retiring top manufacturing executive said.

Decisions to again delay production of electric full-size pickups at a second assembly plant and be more measured with the rollout of EV battery cells at its joint-venture U.S. plants reflect an EV growth rate that has been slower than anticipated, said Gerald Johnson, who will retire at the end of the year after most recently leading GM's global manufacturing operations.

"We're still confident in those investments, but we do have to be agile enough to time and/or retime some of our startup dates so that we are hitting the market with the right product at the right time frame," Johnson told Automotive News. "The plans that we laid out a year ago, we have to be able to look at the market today and make adjustments and act accordingly. I think that's smart business."

Those adjustments include pushing back production of the Chevrolet Silverado EV and GMC Sierra EV pickups at GM's Orion Assembly plant in Michigan by six months, until mid-2026, GM CEO Mary Barra said July 23. GM had previously delayed the launch at Orion until late 2025. The EV pickups initially will be built at GM's Factory Zero plant in Detroit. Buick also indefinitely postponed its first EV, which Barra said had been planned for 2024, and GM will add battery cell capacity at its Ultium Cells LLC joint venture with LG Energy Solution in what she called "a measured cadence."

GM is not the only automaker slowing its EV investment plans. Mass-market consumers are more reluctant than early adopters to buy EVs, citing higher prices and not enough public charging. GM scaled back its 2024 EV production targets from as many as 300,000 vehicles to as many as 250,000, though executives say they still believe the company can achieve positive variable profit, excluding fixed costs.

The company is launching more EV models this year, including the Sierra EV, the Cadillac Optiq compact crossover and the Chevrolet Equinox EV compact crossover that will start around US $35,000 including shipping.

"We can control capital spend. We can control execution and timing. We can't control demand. That, we have to respond and react to," Johnson said. "The market will tell us the right time and, quite frankly, the right product and the right product mixes. We've allowed ourselves enough flexibility, though, with our ICE and EV portfolio and interplaying our plants so that they're flexible to move with the market demand."

GM's factory in Spring Hill, Tenn., for instance, turns out both the gasoline-powered Cadillac XT5 and XT6 crossovers and the electric Cadillac Lyriq midsize crossover. The automaker will take a similar approach when it converts its Fairfax Assembly plant in Kansas next year to build both the gasoline-burning Cadillac XT4 compact crossover and the next-generation Chevrolet Bolt EV.

Separately, GM last year announced more than US $2 billion in upgrades at factories in the U.S. and Canada to build future versions of the gasoline Silverado and Sierra pickups, and the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade full-size SUVs.

"We do see a fairly long horizon still — a decade or so, perhaps even, for our large pickup and large SUV market," Johnson said. "Our products have to stay fresh and relevant in the market."

David Whiston, a U.S. autos equity analyst with Morningstar Research Services, said "plenty of runway" remains for internal combustion engines.

It makes sense for automakers to be flexible with manufacturing to responsibly manage investment and avoid being left behind when the demand curve changes, he said.

"I don't see a point in rushing to make EVs they may not be able to sell," Whiston said. "Whatever you can do to control costs without abandoning the investment altogether is really the best course of action at this point."

Leading GM's manufacturing operations going forward will be Jens Peter Clausen, who joined GM in April and shares the title of executive vice president of global manufacturing and sustainability with Johnson. Clausen brings experience at Tesla, Google and the Lego toy company. GM said Clausen was not available for an interview.

The transition has been "well-planned and timed-out," said Johnson, adding that he and Clausen have spent time visiting manufacturing facilities and discussing GM's manufacturing strategy to ensure the company does not lose momentum when Johnson departs.

GM's hiring of leaders from outside the automaker, such as Clausen, as well as from within the company to fill key roles ensures "we have a great mix of exposures and experiences," he said. "Ultimately, that is going to help us all do well and at least broaden the number of ideas and answers or solutions that we get to look at."