Earlier this week, General Motors CEO Mary Barra caused a bit of a stir when she announced that the U.S. automaker was adjusting its future strategy to potentially include more plug-in hybrid models in its lineup, suggesting that the company may have back-pedaled on its commitment to going all-electric and ending gas-powered vehicle sales by 2035. However, the momentum of the market suggests GM’s new hybrid plan likely won’t have any significant impact on its electric vehicle development, deployment, and sales growth—and here’s why.
What Was Actually Said
GM’s existing EV strategy is not, in fact, changing. Barra doubled down on “eliminating tailpipe emissions from light-duty vehicles by 2035” in yesterday’s investment call. In fact, the plan for 2024 hasn’t changed a bit. This year, GM plans to launch gas-powered, non-hybrid Chevy Equinox, Traverse, Tahoe, and Suburban SUVs as well as an updated GMC Acadia and next-generation Buick Enclave for the 2024 model year. Additionally, on the all-electric front, the automaker has plans to introduce or expand production of its Silverado EV and GMC Sierra EV pickup trucks, the all-new Equinox electric SUV, and luxurious Cadillac Escalade IQ and Celestiq (along with the existing Lyriq).
Considering no changes for 2024’s plan, any potential new hybrid trims or models will come next year or later, and as additions to, not replacements for, its overall BEV plan. “Our forward plans include bringing our plug-in hybrid technology to select vehicles in North America,” Barra confirmed but did not elaborate which models.
Barra did confirm that any PHEVs sold will be compliance models, added to the mix only to meet stricter emissions regulations. GM plans to “deliver the program in a capital- and cost-efficient way because the technology is already in production in other markets.”
But Which Hybrids?
That last line from Barra suggests we should not expect GM to develop any all-new PHEVs, like a reinvention of the Chevy Volt that was canceled in 2019 due to disappointing sales. Instead, we should expect hybridized versions of existing models and trims.
Currently, GM sells a redesigned plug-in hybrid Equinox SUV in China, which could easily come to the U.S.; it sports a 170 horsepower 1.5-liter gas engine paired with an e-motor that boosts additional power (though total output isn’t listed yet). Buick also sells the Velite 6 PHEV sedan in China, which offers a similar 1.5-liter gas engine paired with two e-motors, offering up to 37 miles of all-electric driving range; it’s not likely this new model would come to the U.S., but its powertrain could potentially slot into a U.S. model.
Common Infrastructure Goal
“Deploying plug-in technology in strategic segments will deliver some of the environmental benefits of EVs as the nation continues to build its charging infrastructure,” said Barra, making another big point about the shifting hybrid-EV mix in the lineup. With public charging that most observers agree isn’t ready for mass adoption of full EVs, PHEVs offer the useful benefit of being well-suited to a home charging model. With a gasoline engine as a backup, stops at unreliable or inconveniently located public chargers aren’t necessary. As the infrastructure improves, it may support more EVs.
EV Sales on Track
In this week’s investor call, GM’s executives also noted that EV sales are on track to be profitable in 2024, should the automaker manage to finally iron out the rest of its software and production problems that have plagued most of its all-electric vehicle launches, including the Cadillac Lyriq, GMC Hummer, and led to a temporary stop-sale of the Chevy Blazer EV. Last year, GM dealt with a semiconductor shortage, UAW strike production stoppage, shifting federal policies, and plummeting EV prices thanks to Tesla’s aggressive price-cutting moves.
For 2024, GM claims that it’s on track to move between 200,000 and 300,000 electric vehicles this year across its U.S. and China markets, with the U.S. market achieving at least a 10 percent EV product sales mix by the end of the year (up from 7 percent in 2023). The company also claimed that it has at least 100,000 reservations for electric pickups across its Chevrolet, GMC, and Hummer brands. GM claims that if it achieves 200,000 EV sales, it will record a variable profit on its EV models.
The bottom line is that PHEVs won’t be replacing any EVs in GM’s overall plan, but we may see a few plug-in compliance versions of existing vehicles that weren’t previously planned.
