Automotive > Infotainment & Telematics Blog

GM's Barra Misses the EV Boat

by Roger Lanctot | Sep 21, 2017

China is considering joining the rising bandwagon of nations seeking to cap sales of fossil fuel vehicles. General Motors CEO Mary Barra spoke on the subject last Friday in Shanghai suggesting that China ought to move with caution.

The New York Times quoted Barra thus: “I think it works best when, instead of mandating, customers are choosing the technology that meets their needs.”

http://tinyurl.com/y98acz7f - “GM Chief, in China, Challenges Planned Ban of Gasoline Cars” – NYTimes.com

The absurdity of Barra’s statement is mind boggling on almost too many levels to comprehend. Let’s deconstruct.

1)     Consumers have little ability to buy the car they want. They are limited, by definition, to what is on offer from car makers.

2)     Car makers spend billions of dollars TELLING consumers what kind of cars they want.

3)     Occasionally, consumers vote frequently enough for a particular kind of vehicle – an SUV, crossover or pickup truck – that car makers shift their focus to manufacturing these vehicles.

4)     The car purchasing decisions of consumers have consequences for the economy and the environment – a proposition in which government regulators have an interest as emissions and congestion increase unabated.

5)     Government mandates are often necessary to mitigate congestion and vehicle emissions as well as to reduce annual highway fatalities.

What does this mean?

A)    Mary Barra is disingenuous in suggesting that vehicle purchasing decisions are beyond the interest of governments.

B)    Barra is disingenuous in not acknowledging GM’s own dependence on government assistance in the form of mandates and financial aid.

C)    Barra is foolish for failing to recognize that government mandates such as fuel efficiency requirements in the U.S. ultimately opened the door to Asian competitors who embraced the mandates that companies like GM resisted.

What is interesting is to consider the fact that competing car companies such as Renault Nissan Mitsubishi and PSA are wrestling with the same mandates, acknowledging the role of governments, but avoiding the opportunity to chide regulators. In fact, German auto makers and Volvo have made extremely aggressive announcements regarding their plans to embrace electrification and expand their offerings of electrified vehicle powertrains.

Barra’s chafing at China’s hints at regulated EV emphasis seems not only out of step but pointless – especially given the fact that GM, like many other Western auto makers, is increasingly dependent on continued sales success in the Middle Kingdom. If anything, GM should be seeking to leverage the nascent success of its Maven division, which is increasingly leveraging the Bolt EV, as part of GM’s only avenue toward transportation innovation.

Speaking at the recent Technology in Motion event at the Cobo Center two weeks ago, Rachel Bhattacharya, chief growth officer at Maven, noted GM’s efforts at targeting shuttle and campus transportation opportunities in China along with its Gig efforts in Australia and expansion in Brazil. The one piece of GM that actually has the potential to disrupt transportation markets somehow gets short shrift from GM’s own CEO.

When speaking in China about China’s transportation priorities GM ought to be placing the Bolt EV front and center along with announced plans for follow-on EV offerings. At the same time, missing a chance to tout Maven is an egregious error as this new GM brand needs all the promotion and exposure it can get.

The importance of Maven to GM’s future is critical because it opens the door to ad hoc car sharing and ride hailing opportunities – since Maven is making cars available for Lyft drivers lacking an acceptable car. In fact, a substantial portion of the millions of Maven miles driven have been driven by Maven/Lyft lessees.

As Bhattacharya made clear in her comments two weeks ago, Maven’s pioneering activities are essential to GM’s electrified future. Maven drivers are helping to identify ideal locations for charging stations which, in many cases, are not surprisingly located close to transit stops.

For Barra to complain about government EV mandates when GM has an EV in its portfolio, with plans for more, along with a service delivery platform ideally suited to EV applications is curious at the very least. PSA and Renault Nissan Mitsubishi are not complaining about government EV mandates – though they may grouse a bit about lackluster consumer interest.

PSA and Renault Nissan Mitsubishi are pursuing aggressive growth trajectories and EVs are a part of that proposition. Both companies are partnering and making high profile acquisitions in order to scale up for the next great challenges in transportation – automation and electrification. This is no time to complain.

In contrast, GM is in retreat – selling off Opel and exiting markets – and complaining about government intervention. Something appears to be desperately wrong at GM. Given the widespread reported or rumored interest in FCA being detected from China and South Korea (Hyundai), perhaps it is time for GM to reconsider its rebuff of FCA CEO Sergio Marchionne’s suggested merger.

It looks like it’s time for GM to go big or go home. A merger with FCA may be the only reasonable path to growth and future profitability. And we are all wondering what GM intends to do with Maven. Barra needs to send a signal that Maven is at the core of future growth opportunities for GM.

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