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General Motors is Going Electric, Plans to Phase Out Internal Combustion Engine Vehicles by 2035

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【Summary】​U.S. automaker General Motors announced on Thursday that it plans to become a carbon neutral company by 2040. To reach that goal, the automaker plans to phase out internal combustion engine models, including light-duty trucks and SUVs by 2035 in what will be a historic move for the company that has been building gas-powered vehicles since 1908.

Eric Walz    Jan 28, 2021 4:15 PM PT
General Motors is Going Electric, Plans to Phase Out Internal Combustion Engine Vehicles by 2035
GM's newly unveiled logo resembles an electrical plug and hints at its electric future.

U.S. automaker General Motors announced on Thursday that it plans to become a carbon neutral company by 2040. To reach that agressive goal, the automaker plans to phase out internal combustion engine models, including light-duty trucks and SUVs by 2035 in what will be a historic move for the company that has been building gas-powered vehicles since 1908.

For GM, its a pivotal time in the company's history and the automaker is at a crossroads. The automaker can continue to build hundreds of thousands of highly profitable gas-guzzling trucks and SUVs in the short term, but doing so would put the company behind technology-wise as the rest of the world's automakers switch to battery-powered vehicles.

GM's major announcement comes as California electric vehicle maker Tesla has risen to become the world's most valuable automaker with a market cap topping $800 billion, leaving GM and its rival in a rush to catch up. 

Automakers across the globe are also making plans to electrify their model lineups including Volkswagen and South Korean automaker Hyundai Motor Co., leaving GM little choice but to invest billions in the electrification of its future model lineup over the next 14 years as competition looms.

The Detroit-based automaker also announced it signed the "Business Ambition Pledge for 1.5⁰C", a global initiative which calls on companies to commit to set ambitious science-based emissions reduction targets to fight climate change. To date, over 300 global companies have signed the Business Ambition for 1.5°C commitment.

In addition to GM's carbon neutral goals, the company worked with the Environmental Defense Fund (EDF) to develop a shared vision of an all-electric future and work to eliminate tailpipe emissions from its light-duty vehicles.

GM's focus will be offering zero-emissions electric vehicles across a range of price points and working with all stakeholders, including the EDF, to build out the necessary EV charging infrastructure and promote consumer acceptance of electric vehicles. 

"General Motors is joining governments and companies around the globe working to establish a safer, greener and better world," said Mary Barra, GM Chairman and CEO. "We encourage others to follow suit and make a significant impact on our industry and on the economy as a whole."

To realize its goals, GM said it plans to "decarbonize" its vehicle portfolio by transitioning to battery electric vehicles or other zero-emissions vehicle technology such as hydrogen fuel cells.

GM's $27 Billion Investment in EVs

The automaker is investing $27 billion in electric and autonomous vehicles over the next five years, which represents an additional $7 billion up from the $20 billion the automaker pledged in March 2020.

GM plans to offer 30 all-electric models globally by 2025 and 40 percent of the company's U.S. models offered will be battery electric vehicles by the end of 2025. 

This investment includes the continued development of GM's Ultium battery technology which will underpin GM's future electric vehicles. GM unveiled its new Ultium EV platform and battery technology last March.

The Ultium family of powertrains include five different units and three electric motors which are configurable for rear wheel, front wheel and all-wheel-drive electric models. It includes two powertrains designed for GM's future electric pickup trucks and SUVs, including a front or rear wheel drive powertrain and a dual motor version for all-wheel-drive electric trucks. 

GM's new electric skateboard platform for EVs will standardize many of the electronics and components and allow the automaker to build more cost efficient electric vehicles. 

As part of GM's plans, the automaker is converting its Detroit-Hamtramck factory in Michigan to produce only electric vehicles. The new factory has been renamed "Factory ZERO". GM's Spring Hill Manufacturing plant in Tennessee is also being retooled to build electric vehicles.

The batteries for GM's electric vehicles will be built in Ohio, at a new joint venture battery plant with South Korean battery maker LG Chem.  The two companies will invest up to $2.3 billion in the equally owned joint venture company. GM said the battery plant will be flexible enough to adapt to new advancements in EV battery technology and materials.

GM's battery partner LG Chem is one of the world's biggest suppliers of EV batteries to the auto industry along with South Korea-based Samsung and Japan's Panasonic, which is Tesla's battery partner.

More than half of GM's capital spending and product development team will be devoted to electric and electric-autonomous vehicle programs, the company says. Over the next several years GM plans to offer an EV for every customer at a variety of price points, including crossovers, SUVs, pickup trucks and sedans.

GM said it will also continue to increase the fuel efficiency of its internal combustion vehicles in accordance with regional fuel economy and greenhouse gas regulations as its transitions to building mostly battery-powered vehicles.

Some of these initiatives include fuel economy improvement technologies, such as Stop/Start features that turn off the engine whenever the vehicle is stopped, such as at a red traffic light. 

Other improvements across GM's model lineup include building more aerodynamic vehicles equipped with low rolling resistance tires, using smaller, turbo-charged engines to replace six and eight cylinder power plants and using more efficient transmissions to improve fuel economy.

GM is also collaborating with suppliers to set ambitious targets to reduce emissions, increase transparency and source more sustainable materials.

GM will source 100 percent renewable energy to power its U.S. sites by 2030 and global sites by 2035, which represents a five-year acceleration of the company's previously announced global goal.

The automaker's plans however do not mean its will be an entirely zero-emissions company. GM is likely to still produce some heavy-duty commercial vehicles that at least partially rely on an internal combustion engine. 

To account for the expected remaining carbon emissions from GM's heavy-duty commercial vehicles, GM expects to invest in carbon credits or offsets.

Carbon offsets are created when a business invests in ways to reduce greenhouse gas emissions outside of their core business. In GM's case, this could be an environmental project such as planting millions of trees to reduce carbon dioxide in the air. These investments are known as "carbon projects"

All of these new electric vehicles that GM plans to build will need a place to charge. The company is working with charging operator EVgo to triple the size of the nation's largest public fast charging network by adding more than 2,700 new fast chargers by the end of 2025, a move that will help accelerate the widespread electric vehicle adoption. The new fast chargers will be powered by 100 percent renewable energy. 

GM's bold electrification plans will be tested with the launch of the 1,000 horsepower Hummer EV in 2021, which will serve as an experiment to see if GM's loyal truck customers are keen on switching to battery powered models. 

With a large portion of GM's annual profits currently coming from the sales of full-size trucks and SUVs equipped with combustion engines, the automaker is not in a position to phase them out just yet. In addition, GM's future EVs will not not have the same profit margins as its current SUVs and pickups, so the company must plan carefully (and quickly) for its future.

Within a few years, dozens of new EVs will be hitting the market from many of the world's top automakers, giving consumers many new choices when shopping for a new vehicle. So perhaps GM's biggest challenge will be to build affordable EVs that car buyers want.

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