General Motors Co. is experiencing issues with automation supply for battery module production, which is slowing its electric vehicle production ramp-up, executives told investors.
CEO Mary Barra said Tuesday that the automaker has experienced “unexpected delays” because an unnamed automation equipment supplier has struggled with “delivery issues that are constraining module assembly capacity.”
The hiccup in production comes as GM is in the midst of a breakout year for its EVs based on its new Ultium electric platform, with launches planned for the electrified versions of three popular Chevrolet products: the Silverado, Equinox and Blazer.
Barra stressed the automaker still intends to meet its stated EV production goals of 100,000 units built by the end of 2023 in North America and 400,000 by the middle of next year. GM did meet its target of making 50,000 EVs in the first half of the year.
“What you’re going to see in the second half of this year — and then really crank up in the first half of next year — is a lot more Ultium-based products,” Barra said.
She added that GM thought the supplier was “on track for the delivery that they had.”
“We’ve already seen a lot of improvement from, I’ll say, the last four-to-six weeks,” she said. “We’re going to continue on that path.”
GM has sent manufacturing engineering teams to help the automation supplier improve its delivery. The Detroit automaker has also added manual module assembly lines at its EV plants.
To ensure its coming launches are not affected by the issue, GM is installing additional module lines first at its Factory Zero Detroit-Hamtramck Assembly Center and Spring Hill, Tennessee, plant this summer, then at its Ramos Arizpe plant in Mexico this fall, and lastly its CAMI plant in Ontario in the second quarter of 2024.
Barra called the situation with the supplier “disappointing,” telling investors she’s “personally been reviewing the lines.”
“We’ll get this behind us,” she said. “I’m very confident of the teams we have in place.”
She expects the situation to be resolved by the end of the year, if not before then.
Still, after delivering only 49 Hummer EVs this year, Barra said GM is planning to increase production of the niche SUV by “thousands of units” in the second half of 2023.
Barra added that production of battery cells, which go into the modules, is ahead of schedule. GM has one operating Ultium Cells LLC joint-venture plant with LG Energy Solution in northeast Ohio.
“Demand for our EVs remains very strong because the Ultium platform is purpose-built for electric vehicles,” Barra said. “It does not force customers to compromise on style, performance, utility, range or towing.
Meanwhile, experts are seeing demand for EVs start to stagnate, leading them to question the high pricing of the vehicles.
More:Unplugged: Slow EV sales at odds with automakers’ electric ambitions
When it comes to pricing, the company is watching what’s happening in the marketplace, Barra told investors, adding: “I think one of the things we’ve demonstrated for almost 15 years now is we’re going to be very disciplined with incentives and with our vehicles.”
GM believes it has priced its EVs “right,” she said and the automaker has “a lot of pent-up demand” for the products.
khall@detroitnews.com
Twitter: @bykaleahall