GM strives for resilient EV battery supply chain

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DETROIT — General Motors is working to build a resilient battery supply chain as it moves into the next phase of electric vehicle development, drawing on lessons learned during the ongoing semiconductor shortage, CEO Mary Barra said Thursday.

The automaker wants battery suppliers, many of which are new to working with GM, to source from multiple locations as it begins to secure materials for EV production starting in 2026, Barra said at an Automotive Press Association event in Detroit. GM learned from its approach to securing microchips for future production so the company is not as reliant on any one factory, she said.

Adding redundancy in the supply chain would help to prevent production stoppages created by issues at a single supplier, such as the COVID-19 outbreak that took a Malaysian chip factory offline last year. It also will be crucial as vehicles require more chips to power the software and technology built into them, she said.

GM says it has signed agreements with suppliers to secure all of the necessary battery materials to produce 1 million EVs in North America in 2025.

“We want to have a partnership where we both win together,” Barra said. “A lot of times, these are suppliers that are new to us, and so I’m excited about how we’re proceeding on that. And like I said, why do I feel confident? Because we got signed agreements. And we’ll just keep building on that.”

As GM moves ahead with its electrification goals, Barra said the automaker continues to wait for the Treasury Department to finalize rules governing federal EV tax credits that were passed this year as part of the Inflation Reduction Act. The $7,500 credits come with phased-in requirements for sourcing battery components from North America and of critical minerals in the U.S. or nations with which it has free-trade agreements.

GM has committed to spending $35 billion on electric and autonomous vehicle development through 2025 and wants its North American light-duty vehicle lineup emissions-free by 2035. The automaker will have four plants producing its proprietary Ultium batteries in a joint venture with LG Energy Solution — in Ohio, Tennessee, Michigan and a yet-to-be-disclosed fourth U.S. location — and has outlined plans to have five North American plants assembling EVs as of 2025.

“There’s quite a bit that I think we’re extremely well-positioned for, but we got to see what the final rules are to get definitive on that,” Barra said.

GM is banking on customer adoption of EVs, spurred on not only by federal tax credits but also by making them attractive and fun to drive, she said. Additionally, some states — most notably California — have taken steps toward phasing out the sale of new gas-powered vehicles by 2035.

Forty percent of EV orders are from customers new to the automaker, Barra said.

“Our premise always at General Motors has been: Let’s just create such great electric vehicles and solve the charging issue for people that they want them, as opposed to being from a regulatory perspective pushed into them, because that’s when you’ve got to worry about what your profitability looks like,” Barra said.

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