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Bloomberg News
June 10, 2021

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General Motors Co.’s plan to bring out the most electric vehicles in the U.S. over the next three years may end up ceding market share to the likes of Toyota Motor Corp. and Honda Motor Co., which are choosing to emphasize refreshing their more-profitable gasoline-burning vehicles, according to a report from Bank of America.

GM will replace only 14% of its annual sales volume with new models from 2022 to 2024, about half the rate Honda will freshen its cars. Toyota will replace its lineup at a rate of 26%, beating the industry average of 21%. Ford will replace 17% of its volume with new vehicles while pushing more EVs, according to the annual Car Wars study produced by BofA analyst John Murphy.

That’s not due to lax investment by GM. It’s because the Detroit automaker is investing more in electric vehicles in the next few years, while Honda and Toyota are spending to bolster their existing internal-combustion vehicle lineups. Because EVs sell in limited numbers, the new models GM that plans to introduce could result in lower overall market share if consumers don’t embrace the technology quickly.

GM’s replacement plan is the most stark. Murphy measures replacement rate by looking at new-model plans and forecasting volume for those vehicles. Under Chief Executive Officer Mary Barra, GM has pushed for an electric future that means developing battery-powered pickup trucks and SUVs, while conventional models wait longer for a refresh. If Barra’s bet wins, she will cede market share for a few years and then emerge as a leader around mid-decade if consumers end up embracing electric vehicles quickly.

“GM is taking an all-in bet for next three years on EVs,” Murphy said on a webcast. “One of the most amazing things about Mary Barra is her ability to take one or two steps backward to move the ball three, four or five steps forward. She’s recognizing that there may be risk in the short run for greater return in long run.”

Barra has said in investor presentations that developing electric vehicles could help GM win in coastal markets, where plug-ins sell well and GM’s brands are the weakest.

“Toyota and Honda are taking this view that they’re going to need tremendous amounts of money in the future -- like everybody does -- and believe that this transition could happen a bit later,” Murphy said. “So they will play to their strength right now to build their financial resources to fund that future transition, which they believe will happen a bit differently than GM or VW or Tesla.”









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“GM is taking an all-in bet for next three years on EVs,” Murphy said on a webcast. “One of the most amazing things about Mary Barra is her ability to take one or two steps backward to move the ball three, four or five steps forward. She’s recognizing that there may be risk in the short run for greater return in long run.”
That is quite a compliment.

In short, Barra is willing to cede market share short term, to perhaps build a 1950s like GM powerhouse in the future marketplace. A bold move indeed.
 

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Last year's BoA analysis interestingly had GM ahead of Toyota in terms of product refresh/replacement rate, though well behind Honda:

 

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GM has been ceding market share to Toyota and Honda for decades. Big deal.


The real issue here is that GM is playing the long game (for a change). GM's bet is that EV's will be the automotive standard and the rule (not the exception) after 2030 or so. This is forward-looking for GM, which should be a surprise for many of the automotive pundits out there because it's very uncharacteristic of GM to do so.


And Barra is right. Having forward-thinking vehicles will help GM win back the coastal markets.
Just make the cars attractive and full of technology with a style that is attractive and solid performance for a decent price. GM won't be the only EV's on the market.
But GM does need to realize that a Hummer EV is still far too large for dense urban areas, but a Trailblazer EV or a Cadillac SUV about Audi Q4 in size with a 280-300 mile EPA range will do much much better on the coasts.
 

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GM had already given market share to Honda and Toyota over the past three decades, that's nothing new.
The new part is they may beat those stalwarts to market with top notch next generation all electric vehicles in the most mainstream segments.
That's a big gamble, especially if there are any major product delays.

However, it's the only play they have really. Mainstream buyers of ICE vehicles no longer think GM first (or second in many segments), as they had decades earlier. GM's own managerial incompetence has seen to that...
GM is also facing pressure from their cross town rival Ford, with its Mustang Mach E and Ford Lightening already enjoying great press.

We have seen that GM can build quality electric vehicles, with the Volt and Bolt both garnering reputations as top quality vehicles in their respective classes.

The Cadillac and Hummer proposed electric vehicles are exciting to many traditionally non-GM shoppers. But GM has to get more mainstream electrics on the road sooner rather than later in order to survive and thrive.
Electric Equinoxes, Terrains, Traverses, etc., should be fast tracked to help stem the tide of even more buyers choosing Honda/Toyota over the GM brands.

There will be those hold outs who simply do not want to buy an electric vehicle. And even if they had been traditional GM customers, they too may depart to buy a Toyota, if that's the only option. I think this group may be larger than GM thinks, at least in the short term.

But GM's only real play long term is to pull a Dylan and go electric, even if it upsets traditionalists... I think they can stabilize their market share, and even improve it in the next decade with quality mainstream electric vehicles.
 

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Barra is a fool. No one will give a hoot about GM vehicles if they are not cultivating younger buyers right now.
Honda, Toyota and Hyundai get it. GM doesn't.
Don't call it forward thinking, call it what it really is-lazy
 

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GM needs to get some no **** mass market EVs out ASAP to stop the bleeding...it isn't just Toyota and Honda eating their lunch with ICE cars/CUVs...Ford is beating them to the punch w/ bringing attainable EVs to market. While GM is off effing around w/ diagonal driving 9,000lb Hummers, Ford is getting actual usable Lightnings to more customers....while GM is telling us the Lyriq is 2 years away, ford has the Mach E that you can buy today. Having good product is important but having almost as good product out 2-3 years in advance is much better....because now GM will have to convince Ford/Tesla/??? EV owners that their (GM) Ultium EVs are better and worth upgrading to.
 

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GM has been ceding market share to Toyota and Honda for decades. Big deal.


The real issue here is that GM is playing the long game (for a change). GM's bet is that EV's will be the automotive standard and the rule (not the exception) after 2030 or so. This is forward-looking for GM, which should be a surprise for many of the automotive pundits out there because it's very uncharacteristic of GM to do so.


And Barra is right. Having forward-thinking vehicles will help GM win back the coastal markets.
Just make the cars attractive and full of technology with a style that is attractive and solid performance for a decent price. GM won't be the only EV's on the market.
But GM does need to realize that a Hummer EV is still far too large for dense urban areas, but a Trailblazer EV or a Cadillac SUV about Audi Q4 in size with a 280-300 mile EPA range will do much much better on the coasts.
It's not rocket science to look at legislation, past and future. The "forward-looking" Euro governments are legislating gassers out of the market. The Peoples Democratic Republik of Kalifornia and their minions will do likewise even though this is a federal issue, not a state issue.

Betting on a sure thing is great, there are unforeseeable glitches and bumps in the road regarding lektrik nirvana. As someone once said, "The best-laid plans of meeses and men oft go astray." And so they do.

BTW, BofA doesn't know "the Koreans" are two brands? They roll in different lanes.
 
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BTW, BofA doesn't know "the Koreans" are two brands? They roll in different lanes.
It's BofA, for all that's worth. Don't expect much in terms of insightful analysis from them. ;)

Come to think of it, in the U.S. market there are now three South Korean automobile brands: Hyundai, Kia, and Genesis. Soon there will be a fourth, the electric vehicle brand Ioniq.
 

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The problem is still charging. I don't think the public will embrace EV's until it takes seconds to charge the battery instead of 40 minutes plus. I just road tripped from Colorado thru Utah and Idaho up to Montana and back down thru Wyoming, adding 40 minutes stops to recharge would have made the trip a lot longer and less enjoyable. Did I see one charging station at any gas station we stopped at along the way? Nope.

I hope GM has thought about this problem.
 

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GM are not a player in Europe anymore, Toyota are the biggest seller of hybrid cars in Europe that's where the market is in the NOW present time Toyota have gone from a mid table seller in Europe to on the podium in Europe since the EU started to ban demonise diesel cars. Will Toyota do better than GM in the NOW probably yes, in the future l expect it depends on how quickly they reverse engineer the Chevy Bolt l guess that they are probably do at this moment in in time.

GM seem to do all the hard work develop it take all the knocks sorting out all the EV teething problems, Toyota seem to come along cheat reverse engineer it, deliver the Toyota Bolt that works when the time is right for it in the market place.
 
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GM are not a player in Europe anymore, Toyota are the biggest seller of hybrid cars in Europe that's where the market is in the NOW present time Toyota have gone from a mid table seller in Europe to on the podium in Europe since the EU started to ban demonise diesel cars. Will Toyota do better than GM in the NOW probably yes, in the future l expect it depends on how quickly they reverse engineer the Chevy Bolt l guess that they are probably do at this moment in in time.

GM seem to do all the hard work develop it take all the knocks sorting out all the EV teething problems, Toyota seem to come along cheat reverse engineer it, deliver the Toyota Bolt that works when the time is right for it in the market place.

Yup. GM is no longer a player in Europe. The cars it has in its stable are inappropriate for the EU/UK market, except Corvette but only as a low volume exotic.

GM does a lot of the engineering work. So does Toyota. What Toyota does is better engineer what's on the market. And then build it more efficiently and strip out inefficiencies and anything really extraneous. They put in their own flair and brand of marketing. And off to the races they go.

The problem really is with GM. They have a brand problem. Their luxury brand struggles with the very definition of luxury. Their primary brand struggles with selling basic subcompact, compact, and midsize cars. And their premium brand has no cars outside of China and is really still midway thru a brand reinvention in the US.

If GM really gets its head out of the sand and really takes a hard look at what a Chevy and Cadillac can be as EVs, taking into account an overall customer experience, a driving experience, and over all brand, then there really should be no issues with GM "losing ground." In fact, if their product is viewed as a superior EV product, I think they'll have success in gaining ground in the US coastal markets.

And honestly? I think Toyota is a little behind the game a bit. But they can afford to be, as they have extensive hybrid and plugin hybrids already in the market. Those are the bridge products people can go to, while the EV market matures. They have time. Most other companies do not.
 

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That might be one of the reasons why GM is leading with a toy, the Hummer, and not a mainstream vehicle.

I think using HUMMER as a launching point for the Ultium is a very weird choice.
But I do get it. It's as much as a brand revival as a way to slow ramp up on the technology in a visible, high margin, yet low volume product.
My guess is, once all the bugs are worked out on the HUMMER, adapting that tech to Suburban/Yukon/Escalade/Silverado/Tahoe/Sierra is just a matter of course. I figure somewhere in the 2026-8 timeframe, we'll see the conversion of the big trucks to EV. And by 2030, the ICE versions will be either gone or limited to one model.
 

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The problem is still charging. I don't think the public will embrace EV's until it takes seconds to charge the battery instead of 40 minutes plus. I just road tripped from Colorado thru Utah and Idaho up to Montana and back down thru Wyoming, adding 40 minutes stops to recharge would have made the trip a lot longer and less enjoyable. Did I see one charging station at any gas station we stopped at along the way? Nope.

I hope GM has thought about this problem.
That might be one of the reasons why GM is leading with a toy, the Hummer, and not a mainstream vehicle.
 

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I think using HUMMER as a launching point for the Ultium is a very weird choice.
But I do get it. It's as much as a brand revival as a way to slow ramp up on the technology in a visible, high margin, yet low volume product.
My guess is, once all the bugs are worked out on the HUMMER, adapting that tech to Suburban/Yukon/Escalade/Silverado/Tahoe/Sierra is just a matter of course. I figure somewhere in the 2026-8 timeframe, we'll see the conversion of the big trucks to EV. And by 2030, the ICE versions will be either gone or limited to one model.
Definitely offbeat choice, but also different than anyone else's approach. It's a way to stand out in a big, splashy way, and as you noted, accomplishes multiple goals all in one shot. And, it keeps the volume low, as you said - work out the kinks and also gets something low volume on the market while they finish building their Ultium plants!

Kind of fascinating on how many goals the Hummer meets. Or, at least what I perceive to be goals of GM.
 

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One would think GM was on the Verge of colapse.
GM does extremely well in the Markets it’s focused on, North America, Chainah, South America.

I would say , the results speak for themselves… They have a healthy business and loads of investment cash
There is the truth, you have to look where the world is at in the NOW.

Toyota sold 520,000 hybrids in Europe last year, they are the biggest improvers in general sales in Europe have jumped from mid table brand to No3 in Europe as diesels have been demonised by the European Union Government with 34 Euro billion fines on automakers gasoline/diesel models, without the bomb proof reliable diesels, the Toyota electric/gasoline hybrids reliability is starting to shine though.

2020 Toyota Mo Co Hybrid Market share dominance is in the NOW, that will fade away after 2035 once it's all electric.





We are talking about a "car" market that is 2.3% in the US at the moment, where not a lot of profit is being made at the moment, it's not that big that's what matter the NOW won't make GM collapse NOW.

If Biden decides on a climate change no time to waste future if the trucks are not up to speed ready for that the Ford, GM & Stellantis Group full sized pick-ups are not ready by 2035 when market worldwide changes to an EV future, can't see the Chevy Bolt with it's losses carrying GM as a company then, that along way of though 14 years.

USA classic pick-up trucks F-Series, Silverado & Ram these full sized trucks are still the worlds most profitable vehicles on the planet, all three still made it onto the worlds top 10 best selling car/truck model list in 2020. Yes it is the NOW that matters GM are highly profitable off the back of SUV & Pick-up truck sales. But you have still got to keep an eye on what the average Joe legislators have planned for you, that you will have to make comply with by law to meet whatever future environmental standards average Joe legislator makes.
 
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One would think GM was on the Verge of colapse.
GM does extremely well in the Markets it’s focused on, North America, Chainah, South America.

I would say , the results speak for themselves… They have a healthy business and loads of investment cash
In the case of South America, most of the vehicules was mainly from Opel besides the trucks but now Opel is under the Stellantis(Peugeot-Citroen-Fiat-Chrysler) umbrella and now the Toyota Corolla is available in Brazil with an hybrid flex-fuel version. New Corolla Made in Brazil Will Be the World’s First Flex Hybrid Vehicle – Advanced BioFuels USA
 
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