General Motors (NYSE: GM) CEO Mary Barra recently said persistent supply chain issues will not impact the automaker's goal of reaching electric vehicle profitability by 2025.
Barra said at GM's recent investor conference that there are more up-to-date forecast factors per the Biden administration's Inflation Reduction Act, with the company's EV portfolio expected to have "the same margin profile" as its internal combustion engine portfolio over the next three year when U.S. tax credits are factored in.
"It's clear these credits are going to help usher in a new era of technology innovation and job creation that's going to achieve what was intended," Barra said. "It will be good for the American economy. It'll be good for American families. It'll be good for the environment, and frankly, General Motors is well poised."
General Motors will no longer invest in electric vehicles and then begin selling them in 2025. The ultimate objective will be to sell over 1 million electric vehicles on a yearly basis. In spite of mixed reactions among vehicle makers, General Motors still has hope that it will create around five battery factories in the United States.
According to General Motors, it anticipates that its electric vehicle portfolio will have "the same margin profile" as its internal combustion portfolio, at least within the next three years. In the eyes of Doug Parks, General Motors' executive vice president of global product development of purchasing and supply chain, these expenses could potentially place General Motors' goals at a high risk.
"GM has signed binding agreements to secure the battery raw materials to support 1 million units of annual capacity in North America by 2025," Parks said in a statement. "These are not just handshakes, these are not just meetings or MOUs."
In addition, Doug Parks made special note of General Motors' agreement with Livent so that it can source lithium hydroxide coming from its facility in the United States beginning in 2025.
"We also have an agreement with LG Chem for enough cathode active material through 2030 for the equivalent of 5 million units of EV production, a joint venture with [South Korean steel-making company] Posco on a plant in North America, which we expect will open in Quebec in the first quarter of 2025."