Gm trails far behind tesla in ev sales — ceo mary barra bet the company that will change

In this article * GM Follow your favorite stocksCREATE FREE ACCOUNT GM Chair and CEO Mary Barra addresses investors Oct. 6, 2021 at the GM Tech Center in Warren, Michigan. Photo by Steve

Fecht for General Motors DETROIT — In September 2017, General Motors CEO Mary Barra and her top executives visited the automaker's design dome, considered hallowed ground within the

company for its role in creating GM's most iconic vehicles. Displayed under the showroom lights were about 10 true-to-size clay models of electric vehicles, including designs like the

automaker's Chevy Corvette and a host of crossovers and SUVs. At the time, much of Wall Street's attention was on the nearly $400-a-share price of Tesla, whose celebrity CEO, Elon

Musk, was promising to lead the world's transition to more sustainable energy. The showcase at GM's sprawling tech campus in suburban Detroit gave executives a glimpse at how they

might outpace Tesla and longtime rivals such as Ford Motor, which were also eyeing the buzzy electric vehicle market. The clay models were examples of the range of electric vehicles GM could

build through a new platform the automaker was developing. MARY BARRA'S ELECTRIC VISION GM's strategy for an "all-electric" future was forged over meetings in September

2017, according to executives who were present. Underpinning the plans was a new platform, now known as Ultium, dedicated to electric vehicles the company was developing. Production from

GM's first plant with the new technology started late last year. GM's work on EVs had accelerated after executives in 2015 traveled to Silicon Valley to research emerging trends

and meet with Apple CEO Tim Cook, Google officials and others. In the following days, executives met multiple times to discuss the platform's potential and to hash out a strategy on

electric vehicles, according to several people who were at the previously unreported meetings. That was the week GM's path was decided, said the people, who declined to be named because

the discussions were confidential. The following week, GM publicly declared its belief in an "all-electric future," marking a pivotal moment that would start the legacy automaker

on its most ambitious shift since its founding in 1908. GM's stock that week jumped more than 11% to about $45 a share — marking the largest weekly increase at the time under

Barra's tenure as CEO. The gains would last only a few months but deepened executives' conviction that they had picked the right path. Last year, GM said it planned to invest $30

billion in electric vehicles by 2025, including to revamp existing plants, build U.S. battery plants and launch 30 electric models globally, such as the GMC Hummer EV. "No one has as

many vehicles as we are going to have by 2025," Barra said in an interview with CNBC in January. GM has repeatedly stood by the goal. It is almost five years since GM made its big

declaration, yet the numbers still aren't in GM's favor — at least not for the moment. Tesla still has a dominant 66% of the small but rapidly growing U.S. electric vehicle market,

according to LMC Automotive, while GM has just 6%, as production has been slow to ramp up. It's also being outsold by Ford and Hyundai Motor. Overall, only 8% of GM's sales are

estimated to be electric vehicles. That's including vehicles produced with Chinese joint ventures such as SAIC-GM-Wuling, which produces a small car that was the best-selling electric

vehicle last year in China. But Barra, who in 2014 became the first woman to lead a Detroit automaker, remains convinced that's set to change, and her legacy will arguably hinge on

whether she can transform the automaker into an electric leader. GROWING IN A DIFFERENT WAY Electric vehicles weren't always the priority for Barra, who started at the company as an

18-year-old machinist in the now-defunct Pontiac division in 1980. In her early days as CEO, she was busy putting out fires from the company's past. At first, it was fallout from a

disastrous recall that came after faulty ignitions made people lose control of their older-model cars, resulting in more than 120 deaths. Then Barra — haunted by the automaker's

near-death experience in 2009 during the financial crisis — focused on making the company leaner. Mary Barra, chief executive officer of General Motors Co., presents the new Silverado

elective vehicle during a live-streamed event at the CES 2022 trade show in Las Vegas, Nevada, U.S., on Wednesday, Jan. 5, 2022. Bridgett Bennett | Bloomberg | Getty Images Under her tenure,

Barra would ultimately slash headcount by 27% to 157,000 employees and dramatically shrink the company's global footprint by exiting markets including Australia, Europe and Russia. The

moves, made over several years, would prove to be deeply unpopular with politicians and the United Auto Workers. "All that was about getting the company in better financial shape, in

better operational shape, to be in a position to actually start then on the next journey," said Patricia Russo, independent lead director of GM's board of directors. She added that

the board supports the changes Barra and her team have been making. The cuts laid the groundwork for GM to grow in a different way. As GM worked to become nimbler, Barra became increasingly

sensitive to the signs of change bubbling up across the industry. Tesla was grabbing more attention and threatening to make the gas-guzzling fleets of legacy automakers look like relics.

Others believed popular ride-hailing companies such as Uber and Lyft could further diminish the relevance of the Big Three automakers. "We started to say, OK, we don't want to be

disrupted. We want to lead the transformation," said Barra, now 60. In 2015, Barra took a team of executives on a field trip to Silicon Valley to identify potential disruptions on the

horizon. The leadership team met with people including Apple CEO Tim Cook, Google officials, venture capital investors and officials from Stanford University, where Barra earned her

master's degree in business administration. GM President Mark Reuss announces a $2.2 billion investment in the automaker's Detroit-Hamtramck Assembly plant in Michigan for new

all-electric trucks and autonomous vehicles on Jan. 27, 2020. Michael Wayland / CNBC "We needed a fundamental change in some of the businesses we participated in," GM President

Mark Reuss, who led product development from 2014 to 2018, said in an interview. GM executives decided to focus on the areas they felt could transform the way people get around, including

self-driving vehicles and car sharing. Another major category: electric vehicles. After the trip, GM moved to act on the potential disruptions it had identified. That included working to

race ahead of Tesla, which was promising to deliver the first affordable, mass-market electric vehicle. In late 2016, GM beat Tesla to the punch with its Chevrolet Bolt, which went on sale

with a price tag of $37,500. But like GM's similarly named Volt plug-in hybrid introduced several years earlier, the Bolt didn't have the same cachet as Tesla's cars, and its

sales remain minimal. A NEW PLATFORM As GM ramped up production of the Bolt in 2017, the company was intensifying work on a secret project that executives believed could supercharge the

company's push into electric vehicles. The new platform — now known as Ultium — was essentially a base that could be used to produce a range of electric vehicles, with the

company's batteries built into the frame. Until then, GM and other legacy automakers were pushing out EVs by essentially stuffing battery packs into modified vehicle frames. It was a

clunky process that could get cars and trucks out quickly but didn't unlock the full potential of the vehicles. "When we started architecting Ultium, we really took a big

leap," Reuss said. "That was the beginning of how to put together a plan to do it and transform to an all-electric future." By fall 2017, GM executives were in the design dome

looking at the clay models of electric vehicles, many for the first time. They are an early step in sculpting a vehicle's potential design. Electric Chevrolet Silverado shown at the

New York Auto Show, April, 2022. Scott Mlyn | CNBC One was similar to a souped-up Corvette. Another was a crossover like the Chevrolet Blazer. Also present were SUVs like the Cadillac

Escalade. A bubbly-looking vehicle didn't resemble any of GM's products but would eventually become the Cruise Origin self-driving shuttle. Nearly five years later, Barra still

believes the Ultium platform and supporting technologies, including its batteries and its software system, Ultifi, are the foundation for doubling the company's revenue by 2030.

Production from GM's first plant with the new technology started last year, with the Hummer EV pickup. "We realized to really get scale with EVs, we needed to have a dedicated EV

platform," Barra said. "That's what's enabling us to go so fast and have this broad portfolio of vehicles." READ MORE ABOUT ELECTRIC VEHICLES, BATTERIES AND CHIPS

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and more: These global stocks will soar on the $324 billion autonomous vehicle boom, analysts say Other legacy automakers including Ford, BMW and Toyota aren't expected to start

production with dedicated EV platforms for another few years because of the time it takes to develop and build out plants. Tesla and other EV startups, meanwhile, don't have the same

scale as legacy automakers. "We already have what other people are just now talking about that they're going to do, and I don't think the world quite realizes that yet,"

said Barra, who is pushing to make GM a "platform innovator" and leverage its Ultium technologies across industries including aviation and autonomous ride-sharing. Mark Wakefield,

co-leader of the automotive and industrial practice at AlixPartners, said having a dedicated EV platform is crucial to lowering production costs and growing scale, as Tesla has done.

"For hitting that mass market, it absolutely needs to be a ground-up EV design," Wakefield said. Already, GM's Ultium platform has helped power the launch of the Cadillac

Lyriq crossover and a commercial van, as well as the GMC Hummer pickup. Production of the new models has moved at a snail's pace, however, as the company works on streamlining

operations and battles supply constraints, including limited availability of semiconductor chips. GM this year is expected to become the first automaker after Tesla to mass-produce

lithium-ion batteries for EVs in the U.S., giving it another advantage for nimbly scaling electric vehicles. Other automakers such as Ford and Volkswagen are just putting shovels in the

ground for their battery factories. To unlock value that investors have awarded some EV startups, Wall Street has pressured GM to spin off its electric vehicle business, including Ultium.

Barra has remained steadfast in her belief that the assets are better under one company. The market hasn't agreed so far. Following a runup to more than $65 a share early this year,

GM's stock has been nearly cut in half to under $35 a share. The price once again marks a 14% decline under Barra's tenure. Other factors weighing on the stock include recession

fears and rivals Ford and Hyundai outselling the company in electric vehicles. Some analysts also believe GM's most profitable days may be in the past. 'OUR TIME WILL COME'

Despite the public fanfare around them, electric vehicles still account for well under 10% of sales in the U.S. It's why many experts and analysts predict that Tesla's dominance

will wane as legacy automakers and newcomers such as Rivian and Lucid aggressively ramp up production. "It's almost like a feeding frenzy on Tesla as the market ramps up,"

said Jeff Schuster, president of global forecasting and the Americas at research firm LMC Automotive. The firm expects GM to be the first Detroit automaker to top Tesla in electric vehicle

sales, in part because of the company's scale and Ultium platform. But LMC doesn't forecast that to happen until 2029. John Murphy, lead analyst at BofA Securities, expects GM to

overtake Tesla by mid-decade, in line with Barra's own prediction. "Our time will come," Barra said during an interview early this year at Detroit's historic Fox Theater.

At the time, GM was unveiling an electric version of its popular Chevrolet Silverado. The pickup truck is slated to roll out next year, along with electric versions of the Chevrolet Equinox

and Chevrolet Blazer. As the company's first mainstream EVs designed with the Ultium platform, their sales performance will be key in signaling the company's fate in coming years.

GM executives say the company's fleet of EVs could position it to overtake Tesla by 2025. So far, the company has announced about half of its 30 EVs planned by then. Nearly all are

based on the Ultium platform, and many trace their roots back to the models displayed in the company's design dome in 2017. Executives also say their efforts are about to begin paying

major dividends for the company and its shareholders, as it plans to double annual revenue to $280 billion by 2030. Next year could also bring another milestone for GM. If Barra, who lives

in suburban Detroit with her husband, continues to lead the automaker through next summer, she would make history again by becoming its longest-serving CEO since Alfred Sloan, GM's

first CEO, who served for 13 years. It's another goal Barra seems confident she'll hit. "This is some of the most exciting times, and we've done all the legwork. So,

I'm committed," she said. _Correction: Tesla's stock price in September 2017 was approaching $400 a share. An earlier version of this article misstated the company's

stock price._