The electric car is a funny thing. While nearly everyone seems to agree that they’re the way of the future, no one, at present, seems ready to embrace that eventuality.
Ambivalence about the technology not only plagues the automotive industry, which has kept a lingering gaze on tried and tested gas engine models, but extends to consumers, who have for the most part failed to financially support the idea.
Plug-in vehicle purchases are rising overall, but still count as just a tiny fraction of total auto sales on both the domestic and global stage. In 2016, the 159,139 units sold in the U.S. made up just 0.8% of total car sales in the country, while the number of electric vehicles sold domestically in 2017 reached just 199,826.
Still, the automotive industry is nothing if not industrious, and one stalwart of Detroit is determined to boldly go where no automaker has managed to go before: into the black with an electric car model.
General Motors has been an early success story in the electric car game, selling more battery-powered vehicles than any manufacturer outside of Tesla, thanks largely to the popularity of its Chevrolet Bolt, which closed out last year with more than 23,000 sold. (The similarly-named Chevy Volt also cracked the top 5 best-selling electric models of 2017.)
Still, the automakers’ electric program overall has represented a losing investment—a situation GM CEO Mary Barra pledged would no longer be the case by 2021.
The chief executive recently laid out the vague outlines of an anticipated path to profitability for investors, saying the company had already taken its first steps toward embracing electrification.
The U.S. Patent Office granted GM 661 patents for battery-powered technology between 2010-2015.
In its neonatal stage, the process involves the splitting of GM’s focus between the pursuit of battery-powered cars and more traditional combustion models, according to a report by Reuters.
The electric initiative will operate out of China, with an eye on edging into the demand-based autonomous taxi market there, while the gas-powered branch will be centered in the United States and continue catering to the country’s taste for trucks, SUVs, and other large, petroleum-powered vehicles, according to the report.
The $2.3 billion sale of some losing European ventures last year freed up the capital for GM to double down on its electric bet, and the company has invested more money than ever in research and development of new technology, with more than 1,700 employees dedicated to the project, according to the Reuters report.
One aspect of their work revolves around the creation of “plug and play” structures that will give GM the ability to retrofit cars with a wide range of battery types—ultimately helping the manufacturer cut costs.
Still, perhaps the biggest way GM is embracing the future is by helping to design it. The company has been burning up the lines at the patent office lately, with 661 patents granted for new battery technology alone between 2010 and 2015.
And company officials don’t just want to change the way the fuel cells are made; they also want to alter what they’re made out of—which could lead to the biggest boon of all.
Elemental in GM’s plan to turn profits on electric cars is the element quite literally at the center of the vehicles: Cobalt.
The metal is an integral aspect of the lithium-ion batteries used in electric engines, including those found in most hybrid cars, and the increasing focus on such models has sent cobalt prices soaring in recent years. In 2017, the element fetched upwards of $60,000 per metric ton on the open market, and analysts predicted a mind-boggling 14,900% increase in demand for cobalt—which exists only in finite supply on the planet—by 2030.
To cut down on battery costs, GM is hoping to avoid as much of the hyper-competitive cobalt market as possible by adding more nickel to the mix—a move that not only lessens its reliance on expensive ingredients but also helps the fuel cell store and produce more energy, according to the Reuters report.
The company announced that the switch would bring down battery manufacturing costs by more than 30%, from $145 per kilowatt-hour to less than $100 by 2021. Those savings could then conceivably be passed on to the consumer, resulting in a $6,000 reduction on the Chevy Bolt’s $36,000 price tag, Reuters reported. (Currently, battery construction comprises one-third of that price.)
The new recipe would give GM the option of offering cars that go farther on one charge than current Bolt models, for the same price, or ones that go about the same distance in a single shot for a reduced price.
Those options already put the Detroit company ahead of most other auto manufacturers in terms of preparing for the future, but the final piece of the profitability puzzle lies in the Far East—and far out of GM’s hands.
China is not just the location for GM’s electric vehicle initiative—it’s quickly becoming the de facto capital for battery-powered ambitions across the globe.
The Asian giant represented nearly one-third of total worldwide auto sales in 2016, with 28 million new vehicles sold. And last year, it used that monumental purchasing power to support another emerging trend, when Beijing officials proclaimed the country would soon do away with all combustion-based engines.
That news was coupled with the country’s announcement of intentions to push its vehicle sales to 35 million cars annually by 2025, with at least one-fifth of those autos powered by electricity.
And while China is the largest player chasing a battery-powered future, it’s far from the only one, with several European nations also joining the call to ban fossil fuels in the foreseeable future.
When it comes to the fate of electric vehicles, it seems the writing may be on the wall—and GM has already read the fine print.