Gerald Johnson, GM Executive VP of Global Manufacturing, joined Yahoo Finance Live to talk about the company’s pursuit of an all-electric future.
Video transcription
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SEANA SMITH: Now let’s take a look at our Earth Week coverage. It continues here at Yahoo Finance. And for that we go to Akiko Fujita. Akiko?
Thank you very much for that, Seana. We now focus on the transport sector because [INAUDIBLE] for just over 30% of US emissions. However, one of the world’s largest automakers is now making a bold commitment here. General Motors recently announced a commitment to phase out all cars with internal combustion engines by 2035. For much more on this plan, let’s bring in Gerald Johnson. He is executive vice president of global manufacturing. Gerald, it’s nice to talk to you today.
You’ve definitely gotten off the ground here with some EVs already revealed. We have the Cadillac, the Hummer EV, the upgraded Chevy Bolt. How do you get from now to 2035 from a manufacturing standpoint? What does this revision entail?
GERALD JOHNSON: Yes, thank you Akiko. First of all, we will continue to do what we have done here. We announced our investment strategy and $ 27 billion in investments to help deliver the transformation. Of course, that investment goes towards the product. But it’s also about handing over our manufacturing operations to build an EV portfolio. Excellent examples, I think, are our Factory ZERO operation, which we are currently rebooting to run the EV Hummer, and also the cruise product which is an EV AV product that we are going to introduce there.
And we just announced the Silverado truck too. So we bring new products to the market. And we make sure that all those products cover the full range of market segments as we move into the future.
AKIKO FUJITA: So let’s talk about the production overhaul there. You mentioned Factory ZERO, 4 and 1/2 million square feet here, where you’re essentially rebuilding the factory floor to be able to configure for electric vehicles. What does that mean, number one from the employee’s point of view, the number of employees, but also from just the machines, the assembly line? I mean, walk us through the details.
GERALD JOHNSON: Certainly. So you are absolutely right. 4 and 1/2 million square feet starts with the complete clearing of the place. And that’s what we did. And I mean literally an open space football field to now allow us to rerun all the technology going into that factory for the convenience needed to make an EV product for the wedding stations, also for a whole new paint job and battery self-assembly. work.
To do that and also add all the technology that will make this one of the most technologically automated and competitive factories is what we do in Factory ZERO, and what we will be repeating at our Spring Hill, Tennessee factory where the Lyriq, the new Cadillac we just announced and showed today will be built there, and where we’ve already done a lot of this work and learned a lot like we’ve done the Bolt product in our Orion factory here just outside of Detroit.
So these are the pieces. And all of this means that we can take our employees with us. Factory ZERO will have more employees when we are fully operational again than before. Not to mention what we’re doing with adding battery facilities. We also manufacture cells on site in Lordstown, and we recently announced another site in Tennessee.
We need to own the vertical integration of the product so that we can be confident that we can deliver on our promise of zero tailpipe emissions by 2035 and carbon neutral by 2040.
AKIKO FUJITA: So let’s talk about that vertical then. After all, the big question here is: how do you make electric cars affordable? You are now looking at the market, about 2% of the electric car on the market, a large part of it is Tesla. There are certainly not many drivers who can afford Teslas when it comes to being able to do this on a larger scale. How do you get the buy-in from the customer?
GERALD JOHNSON: Turn right. So the buy-in really comes from experience. I think the customer generally knows now. I think the customer understands the importance of climate change. I think there is a lot of interest [AUDIO OUT] the experience, however. Not enough people have experienced an EV product yet.
We get that chance. You mentioned the costs. So our Bolt EUV is a $ 32,000 vehicle, which is below the average transaction price of vehicles sold today that have an internal combustion engine. The key, of course, remains battery technology. No pun intended, this vehicle’s powerhouse is also where we apply most of the innovation to boost energy density. So we think we’ve taken distance anxiety off the table. Our Altium platform can deliver more than 450 kilometers of electrical performance.
So that was one for the customer. The second, of course, is cost. We are now seeing our way down to cut the cost of a battery by 60%. And so we are on that cost curve. And that allows us to continue to price and offer vehicles across the segment, from smaller SUVs to medium and large pickups to EV Hummers and Cadillacs. So that’s the third piece. The last piece is fast charging. And that’s where we keep innovating.
We believe that when we tackle those things, our market research teaches us while improving those elements that interest customers and are willing to move to an EV product.
AKIKO FUJITA: I wonder if you can speak to the competitive landscape here. There are a number of companies that have entered the EV space. Certainly a very busy one. If you even look at companies like Rivian or Lordstown Motors, how many of these companies do you think will actually survive? Are we likely to see significant consolidation?
GERALD JOHNSON: I dare say that there is not enough space for everyone interested. But I wouldn’t predict who is going to make it and who is not but to say that General Motors will be there and intend to be a leader in that space. But I think the interesting thing is that everyone is feeling the transformation of our industry. So if you go back 100 years when we went from horse and buggy to combustion engines, it’s that kind of transformation.
And then, at the time, we had literally dozens of manufacturers trying to underline their claim in that internal combustion industry, auto industry. And we see that again in EV. We believe that we bring special capabilities, our supply network, our dealer network, our 100 years of production capacity and a lot of innovation from my technical organization.
AKIKO FUJITA: Gerald Johnson, executive vice president of global manufacturing for GM. Appreciate the time today. Thank you very much for joining us.