During GM’s second-quarter earnings call in July, CEO Mary Barra reportedly said the company is launching a new strategy called “Winning with Simplicity”. It’s meant to lower design and engineering costs and reduce complexity in vehicle orders and manufacturing.
GM is aiming to cut trim levels in half to create “fewer part numbers to simplify marketing, engineering, manufacturing while maintaining the best features customers want”.
General Motors is planning to eliminate around 200 engineering jobs from the company. However, the specialized magazine Automotive News says those workers can move to other jobs within the company. It’s being done to “reduce complexity” at the automaking giant.
In a statement, a spokesperson for GM said that the automaker is “taking steps to rebalance our engineering resources to better align with our growth strategy. This will require a small number of engineers to move to other parts of the organization over the next several months. We will work with those who are affected and provide them with an opportunity to apply for open positions.”
$2 billion in cost reductions
Auto News reports that GM is targeting about $2 billion in cost reductions over the next few years. On the call, CEO Barra reportedly said the automaker had identified another $1 billion in fixed cost cuts through 2024. That’ll offset the impact of $1 billion in depreciation and amortization to lower net automotive fixed costs by $2 billion by the end of 2024.
Auto News says that about 5 000 salaried employees have already chosen to take voluntary buyouts this year. That accounts for about $1 billion in cost reductions, and it also prevents layoffs, GM reportedly said at the time.
The company also aims to cut salaries and market spending by $800 million, with “the remainder coming from a significant reduction in all areas of business, including engineering expense, travel, and administrative costs,” Barra said.
Meanwhile, General Motors is already outsourcing some things by, for example, making a strategic investment in Mitra Chem, a Silicon Valley-based innovator in AI-powered battery materials. The US carmaker expects the investment to provide it with development know-how for iron-based cathode materials.
GM is investing in Mitra Chem as part of its Series B funding round. The round will bring in 60 million US dollars for the California-based technology company; however, GM’s share remains open. The US carmaker wants to use the investment to accelerate the commercialization of affordable batteries for its electric cars.
Specifically, GM and Mitra Chem will develop iron-based cathode materials such as lithium manganese iron phosphate (LMFP) for batteries compatible with General Motors’ Ultium electric car platform.
“This is a strategic investment that will further help reinforce GM’s efforts in EV batteries, accelerate our work on affordable battery chemistries like LMFP, and support our efforts to build a US-focused battery supply chain,” says Gil Golan, GM Vice President, Technology Acceleration and Commercialization.
“GM is accelerating larger investments in critical subdomains of battery technology, like cell chemistry, components, and advanced cell production processes. Mitra Chem’s labs, methods, and talent will fit well with our R&D team’s work,” he adds.
According to GM, Mitra Chem’s R&D facility can “simulate, synthesize and test thousands of cathode designs monthly, ranging in size from grams to kilograms”. The AI-powered processes are expected to support significantly shorter learning cycles and shorter time-to-market for new battery cell formulas. There is talk of “a 90% reduction in the time between lab and production”.
“GM’s investment in Mitra Chem will not only help us develop affordable battery chemistries for use in GM vehicles but will also fuel our mission to develop, deploy, and commercialize US-made, iron-based cathode materials that can power EVs, grid-scale electrified energy storage and beyond,” says Vivas Kumar, CEO and co-founder of Mitra Chem.
He says his company’s goal is to transform the cathode from a specialty chemical into a platform technology that differentiates cell performance depending on the end application.
Is Bolt coming back?
A few months ago, General Motors announced that it would no longer sell the Chevrolet Bolt EV and Bolt EUV. Sales hadn’t exactly been stellar, but many Americans deplored one of the most affordable electric vehicles on the US market to go away.
After all, not everyone who wants an EV can afford a Lucid Air, Tesla Model S, or Porsche Taycan, nor does everyone need one. But now it sounds like the Chevrolet Bolt might not be gone for good.
In an interview with NPR, CEO Mary Barra made it sound like it’s only a matter of time before we see a new Bolt. According to Barra, the Bolt was only canceled because it used outdated battery technology, and people know the name well enough to make it worth bringing back potentially.
“It’s our second-generation technology. And the difference between our second generation and third generation, which is Ultium, is a 40% reduction in battery cost,” Barra told NPR. “Bolt is something that has built up a lot of loyalty and equity,” she added before saying that she “can’t say more because I don’t discuss future product programs.”
It will take a while before GM’s cheapest EV will come back. Barrra also says that she believes cheap EVs won’t become as profitable as traditional cars until the next decade.
At a Sanford Bernstein conference, Barra stated that EV battery costs are still too high for manufacturers to build profitable, mass-market vehicles that sell for $30 000 to $40 000. News agency Reuters reported that the GM CEO predicted that electric and combustion vehicle costs will equalize “sometime in the latter part of this decade… maybe a little longer.”