Is GM Changing The Electric Vehicle Game Again?
The General steers a big ship (perhaps, ‘a big truck’ is a more apt analogy… but I digress) and when they make changes they have to do so with serious consideration for what those changes do to their existing businesses. In particular, their profitable businesses like luxury vehicles and pickup trucks.
At the start of 2019, GM announced the Cadillac would be their “lead electric brand”. On December 19, 2019 GM reaffirmed that position by saying that while Cadillac was entering the 2020’s as a gas powered brand, it would exit the decade as an all electric brand.
A few days ago however, GM announced that they are pouring $2.2 Billion dollars in their famed Detroit Hamtramck plant to make the all new GMC Hummer EV (which we covered with a video HERE). Remember that Hamtramck is the factory that built the Chevy Volt and my Cadillac ELR along side the Chevy Cruise stablemate and Cadillac CT6. At the end of November 2018, when the Volt, CT6 and Cruise were canceled, GM announced it was closing 6 factories in Canada and the US, including Hamtramck at the end of 2019.
After fighting with the union (including a prolonged strike) and Detroit politicians, on February 22, 2019 GM slightly extended the life of Hamtramck by saying they would keep making the CT6 in that plant for an additional 8 months. Now comes the news, they are going to produce ONLY EV’s in Hamtramck including the new Hummer pickup and their Cruise Origin (FULLY autonomous shuttle vehicle).
There is solid business logic for converting general purpose auto factory into an EV only factory. You can make EV’s substantially less expensive if you dedicate a line to them. Specifically, EV’s have about 30% few parts and require a factory line that is about 30% shorter. If you produce both EV’s and ICE (gas) vehicles on the same line, you will have about 30% of your assembly staff standing around doing nothing when an EV comes though.
What is less clear is GM’s stance on who is their “electric lead”. One of the three press releases for the Hummer is titled:
General Motors President Mark Reuss shares how battery-electric trucks are a foundation of the all-electric future.
Cadillac will have many larger SUV’s but I don’t think they fall in the category of “Trucks”, especially since they will all most likely be a “top hat” on electric “skateboard” design.
Where does this leave Cadillac?