GM & Mary Barra Place A $35 Billion Bet On EVs

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When I saw the recent article on the early GM electric car prototypes, it reminded me of how the company over the years has been way out in front of its peers from an engineering perspective, but failed to turn that first mover advantage into success in the showroom. When the Detroit Big Three finally decided to address the challenge of the Japanese imports, Ford and Chrysler came up with parts bin specials like the Falcon and Valiant that were as exciting as week-old Wonder bread. GM countered with the Corvair, which although saddled with a flawed rear suspension, featured a lot of creative new thinking. It was the first mass production car in America to offer a turbocharged engine — a decade or more ahead of its peers.

GM next introduced the Chevy Vega, a tidy little hatchback with an aluminum overhead cam four-cylinder engine while Ford and Chrysler continued with iron block pushrod engines. Next came the Fiero, the first mid-engine car from a US manufacturer, and the Cadillac Allanté, a car that was so crazily over-engineered that it was a nightmare to keep running. Fast forward to the EV1 and the Chevy Volt, both of which were on the cusp of the EV revolution but flamed out before reaching exit velocity.

GM Is Building Compelling EVs

Now GM is bringing compelling electric cars to market like the Cadillac Lyriq, the Chevy Equinox EV, and the Chevy Blazer EV. The next generation Chevy Bolt is nearing production, while the electric Hummer, Silverado, and Suburban will be on sale soon. All those cars are going to need batteries, and for that GM has partnered with LG Energy Solution to build a new battery manufacturing facility near Nashville, Tennessee. When completed, that factory and another one in Ohio will be able to produce enough cells to make a new EV battery pack every minute. Already they are producing more battery cells than Tesla, according to Bloomberg Hyperdrive. Josh Tavel, the head of project engineering and manufacturing at GM, told Bloomberg recently, “If the market wants more EVs, we can make them.”

Mary Barra, the CEO of GM since 2014, has a goal to make the company a leader in electric vehicles. The past year has been difficult for Barra and GM. First, interest in EVs has cooled somewhat in the US. Second, the new administration is hellbent on smashing what it calls the “green new scam.” While those factors have convinced Ford and Stellantis to pivot to building more conventional cars, Barra has mostly stayed the course. She has hired Tesla veterans to make GM’s battery capabilities more competitive and taken steps to slash costs in order to achieve the goal of “low cost EV architecture.”

As part of that plan, GM is building another battery factory in Indiana and has made investments in US-based mines for lithium and other minerals. Eventually, Barra’s vision is to create a nationwide supply chain similar to the one BYD has in China. “We’re about giving customers choice. Over the long term, we think EV demand will grow,” Barra said.

GM depends on a global supply chain. The absurd tariff policies of the new administration are raising costs for automakers across the board. GM executives say electricity simply makes for a better car and represents the future of transportation. Batteries are key to solving the cost equation, according to Barra. “There has to be more of a charging infrastructure. There has to be more choice at the lower price points. I think it will happen over time,” she says. “Core battery technology will continue to get better.”

To Ultium And Beyond!

In 2018, Barra and GM president Mark Reuss came up with a plan to push harder into EVs by investing in the battery design that would become Ultium. The idea was to use the same battery cells and modules for every model the company produces and all developed in-house. With one system for every electric car, development costs for new EV models could be dramatically reduced over time. Government subsidies, such as the ones lawmakers would later bundle into Biden’s IRA, didn’t factor into the equation, Reuss says. “This whole business and strategy was planned without any IRA benefit,” he says. Nevertheless, “Kicking the can down the road and hoping for different legislative and greenhouse gas rules happening is a pretty tough way to play the business.”

Kurt Kelty used to work for Tesla. Mary Barra tried to recruit him for years but he didn’t believe GM was serious about its EV intentions. What changed his mind was a tour of GM’s low cost EV architecture of the future. Kelty is now vice president for battery, propulsion, and sustainability. “This is my passion in getting us off fossil fuel,” he told Bloomberg.

His success at GM is largely measured in cost reductions. The company slashed the cost of its battery packs by $60 per kilowatt-hour last year, Kelty says. That achievement was primarily the result of increased sales volume and improved production yields at the cell plants. This year he wants to take out another $30 by selling more cars and enhancing yields even further.  That would get the cost of GM battery packs to about $100 per kilowatt-hour — 50% less than in 2022. Kelty said if that happens, GM’s battery costs will be lower than they are for Tesla.

Kelty’s long term solution is to take a different approach to batteries. Currently GM and LG use a mix of lithium, nickel, manganese, and aluminum in their Ultium cells. The cells are stacked and stuffed into boxes known as modules. Two dozen cells make a module, and 10 modules make up the battery pack for an entry level Blazer or Equinox. The separate modules are necessary to protect the cells, but they also add significant weight. Kelty, who was deeply involved in the development of the 4680 cylindrical battery cells at Tesla, now thinks prismatic cells are the future.

Contrary to their name, prismatic cells are not shaped like prisms. They are more like bricks that stack neatly together. They are encased in hard metal, which provides structure without requiring individual modules. They are the ideal combination of light and space-efficient, Kelty says. (BMW used to use prismatic cells but has now transitioned to cylindrical cells similar to the ones Tesla uses for its next generation Neue Klasse electric cars. Clearly, there is no agreement yet within the auto industry regarding which battery format is best.)

GM signed a deal to purchase its first batch of prismatic cells from Samsung SDI, and will develop its own version of the technology with LG. Over time, GM will convert more of its batteries to prismatic, Kelty says. As part of that transition, he plans to ditch the Ultium name. “The beauty of prismatic cells is that we can reduce the part count by about 50%,” he says. “You reduce your labor, you reduce your initial investment. Overall, you just get a massive price reduction.”

The Advantages Of LFP Technology

Using different battery chemistries can also lower costs, and for that reason GM is incorporating lithium iron phosphate cells into some cars. Although they store less energy than traditional lithium-ion batteries, they are significantly less expensive. GM will use them in the new Chevy Bolt and a version of its Chevy Silverado pickup. Instead of 490 miles a charge, the truck will go 350 miles on a battery charge, Kelty says, but it will cost $6,000 less.

Kelty is also trying to make GM less reliant on foreign suppliers. EV batteries require graphite, 90% of which comes from China. Kelty wants to switch from graphite to silicon, which can be sourced from suppliers in the US. GM also formed a $625 million joint venture with Lithium Americas Corp. in Nevada to mine lithium closer to home. These moves require significant upfront investment in the short term but, especially in the age of tariffs, could bring costs down in the long term, especially if the current tariff insanity persists.

GM EV sales doubled in 2024 and maintained nearly the same pace in the first quarter of 2025. Executives regard EVs as a big opportunity to introduce GM brands to drivers who never would’ve considered them before. More than 60% of the company’s EV customers have never owned a GM car before, says Tavel, the project engineering head. If GM can get the cost of its EVs closer to that of gas cars, sales will take off, he says. “Every customer that buys one will tell you the same thing,” he says. “To me, it’s a no-brainer.”