GM hails Ultium R&D savings potential

GM is researching LFP chemistry for its second-generation Bolt EV due next year

GM hails Ultium R&D savings potential
CEO Mary Barra says Ultium production is now "flowing"

Detroit automaker GM is looking to save costs on its Ultium platform with extensive cell R&D, despite also assuring analysts that the firm is past the issues it has encountered on the battery project.

GM's Ultium platform has previously encountered price overruns and technological delays, but Barra says production of cells, modules, and packs is now "flowing". But the CEO admits that the firm has not yet reached a sustainable cost structure for the platform.

"I think there is still a lot of work to do on improving cell chemistry and getting overall battery cost down," she told analysts at the Bernstein Strategic Decisions conference. "There is a lot of talk about LFP right now and we have announced that we will use LFP chemistry in as we bring the Bolt back online next year."

GM is currently conducting extensive battery R&D at its Warren, MI campus, which Barra says gives the firm "the ability to prototype and do that work with partners and some work on our own or with universities".

"Ultium is chemistry agnostic — with our cell plant one that is up and running in Ohio, and our cell plant two that is scaling on time in Tennessee, and we have further cell plants that will scale up as we need demand," Barra says.

But Barra says GM's biggest cost savings thus far have come in areas other than cell production or broader Ultium platform modifications, instead coming as a result of "less free flow options, having tighter trim packages, maybe not as many trim packages".

She also adds that this pared-back strategy is also "really important for the consumer because they are much clearer on what they are buying".

"We know we have got more cost to take out," she says. "There is a lot that we are working on to leverage AI in some of the business process to take cost and complexity out of what we do."

China crisis

Barra frames the need to cut costs as way to take on Chinese competition, as she reveals that GM is looking to regain a strong position in the Chinese domestic market. But she laments the "overcapacity" in the market as a stumbling block for the firm even in the eventuality that Ultium costs are shaved, and also questioned the long-term viability of the cost environment faced by Chinese competition.

"What is happening in China is not sustainable because it is kind of a price war and circling to the bottom," she says. "No-one is going to win in that scenario."
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Barra struck a similar tone to Ford CEO Jim Farley, who this week predicted major automakers will collapse during the transition to full electrification, saying that "there will be some Chinese OEM that go away..., I think that absolutely has to happen".

Barra also says that GM has " a very solid plan" as to which product lines will see introductions of PHEVs, which the OEM previously confirmed would be coming in 2027 to meet stiffening regulatory sales quotas. She did not, however, announce any specific segments or price points that the PHEVs will target.

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