GM May Simply Be Too Late to Win the Electric Age
By: Steve Levine
Tags: Automobile, Technology, GM, Tesla, Electric Vehicles

GM May Simply Be Too Late to Win the Electric Age

Like Kodak and Nokia, the legacy automaker may be overtaken by the future

GM CEO Mary Barra at an event where she announced a $300 million investment in the GM Orion assembly plant for electric and self-driving vehicles on March 22, 2019, in Lake Orion, Michigan. Photo: Bill Pugliano/Stringer/Getty Images

Is GM in danger, the same as Kodak was before it went down the tubes in the ‘oughts? The same as Nokia before it, too, went from having the “it” product to the dustbin, as easy as you can spell iPhone?

Over the last couple of weeks, senior GM executives have been on a PR blitz to assert that the answer is not only no but hell no. In an appearance on the Freakonomics podcast, CEO Mary Barra admitted that all the world’s auto incumbents won’t “necessarily successfully make the transition” to the apparent new age of electric vehicles. But she strongly suggested that GM would not be one of the fatalities. As did her vice president for EVs, Ken Morris, who said this week on Axios’ Re:Cap podcast that GM is not only moving aggressively into the new world but is in the process of flipping over its entire fleet to electric. “An all-electric company is the ultimate goal,” Morris said.

Hindsight is 20/20 when it comes to knowing which new companies will become juggernauts and which current ones will suffer a forlorn demise. But in GM’s defense, one can fairly argue that, unlike Kodak, Nokia, and other ignominious has-beens, it has been neither blind nor behind the curve. In 2012, before anyone else, GM delivered a plug-in hybrid called the Volt. In 2017, months before Tesla launched its Model 3 sedan, GM debuted the similarly priced, all-electric Bolt. Both the Volt and Bolt were declared car of the year by Motor Trend. Now, GM is saying it will have 30 new electric vehicles on the road by 2025, starting with the Hummer and Cadillac Lyriq next year, and eventually will do away with its combustion fleet entirely.

Isn’t that capturing the future?

Not if you ask Sandy Munro, a former executive at GM and Ford who runs one of the most sought-after automotive design consulting companies in Detroit, in addition to a widely watched YouTube channel. I chatted with Munro on a video call on Tuesday, and he said that GM is late, laden with obsolete infrastructure, and behind the curve. Not to mention that it’s producing “ugly” vehicles. While GM did create the Volt and Bolt, it has also continued to waste tons of time and money on combustion. “Why?” Munro asked. “I was saying that the ICE [internal combustion engine] age will be over in 2030. Now I think it will be 2028.”

“Tesla is miles ahead of everyone,” Munro said. He ticked off advances that Tesla CEO Elon Musk described in his recent Battery Day, which Munro has dissected infinitesimally on his show (here and here). I asked what he thought when he evaluated GM’s next-generation EV battery, called the Ultium. He said he hadn’t bothered to look at it, suggesting there would be nothing surprising or innovative to see. “I know what it is,” he said.

GM’s primary disadvantage is the same faced by all legacy companies at the moment of a paradigmatic shift and confronted specifically right now by every major automaker: It well knows about the new technology but is still milking the old one for profits, and it is difficult — especially when you are a publicly traded company — to simply up and abandon the old for the new.

And even for GM, which seems to be fully engaged, there is its dowdy public image to overcome. In October, Munro asked the approximately 100,000 subscribers to his YouTube channel what they preferred among his next projects—he compared Tesla’s CyberTruck with the future electric Rivian pickup or GM’s Hummer. “It wasn’t even close,” he said. “Ninety-seven percent said the Rivian.”

“Not technology, but psychology will kill you,” Munro said. “Where am I in the customers’ minds?”