In the latest push by a major company to move away from fossil fuels in the fight against climate change, the auto giant said on Thursday it will offer emission-free light-duty vehicles across its price ranges. It will spend US$27-billion to accelerate the transition over the next five years – an increase of US$7-billion from its prepandemic budget.
GM also plans to work with stakeholders, including environmental activists, to develop a charging network for electric vehicles and promote consumer acceptance for gradually phasing out the gas-guzzling internal combustion engines it has built for 113 years.
“General Motors is joining governments and companies around the globe working to establish a safer, greener and better world,” GM chief executive officer Mary Barra said in a statement. “We encourage others to follow suit and make a significant impact on our industry and on the economy as a whole.”
If successful, GM would get to net-zero – when carbon emissions are simultaneously reduced and offset – a decade before the targets of Detroit rival Ford Motor Co. and many countries, including Canada. The strategy points to a transformative retooling of the maker of Chevrolet, Cadillac, Buick and GMC vehicles. Today, its top sellers in North America are pickup trucks and SUVs. The company employs more than 160,000 people, including 5,300 in Canada.
It is the latest in a growing list of major corporations, including global automakers, that have announced plans to deal with the impact of their operations on greenhouse gas emissions – an imperative that is increasingly being demanded by investors.
That point was driven home this week when BlackRock Inc., which manages US$8.7-trillion assets in its investment funds, called on the CEOs of all the companies in its portfolios to provide details of how they will fare in a net-zero economy.
Investors welcomed GM’s announcement, pushing its shares up more than 3 per cent on the New York Stock Exchange on Thursday. Markets have been charged up by the prospects for electric cars. Telsa Inc., the industry’s marquee manufacturer, has seen its stock surge more than sixfold over the past year.
GM is wagering that motorists en masse will embrace EVs and other zero-emission vehicles, as well as autonomous cars. It aims to sell 30 electric models in global markets and 40 per cent of its U.S. product line powered by batteries by the middle of this decade.
The move comes two months after Ms. Barra made headlines by withdrawing GM’s support from the Trump administration in a legal battle against California’s right to set its own clean-air standards. At the time, she said she supported then-president-elect Joe Biden’s plans to expand EV use in the United States.
GM’s shift is underpinned by three main changes: offering the emissions-free fleet, using renewable resources to power U.S. factories by 2030 and global assembly lines by 2035; and buying carbon credits and offsets, which GM said it will do “sparingly.”
Greig Mordue, an engineering professor at McMaster University in Hamilton and a former executive at Toyota Canada, said GM’s carbon-neutral target date is “entirely rational and achievable” and might inspire other automakers to follow suit.
The next 19 years offer plenty of chances for a technological development that could speed the advancement of battery-powered vehicles, or even hydrogen-powered ones, and lower the prices to a range that is affordable for most vehicle buyers, he said.
“A lot of things can change between now and then. And General Motors has set a target,” Prof. Mordue said. “A lot of people will say it’s too far out, and other people will say it’s not far enough out. But they’ve set a target.”
Still, electric vehicles at this point are seen by some as expensive curiosities. They form a tiny part of overall sales, even though the price of a battery has fallen by 85 per cent in the past decade. Prof. Mordue said car makers’ moves toward emissions-free vehicles are limited by what the car buyer wants.
“Are consumers going to go along with this? They’re moving but they’re not moving very quickly,” he said.
The Environmental Defense Fund, a past critic of GM, will work with the automaker to promote the technology to consumers, the organizations said.
The Ontario auto manufacturing sector is undergoing a notable shift toward electric vehicles, plant renewals and big investments that secure well-paying jobs.
GM in January said it will convert its CAMI plant in Ingersoll, Ont., spending $1-billion to make a new line of electric parcel vans as it phases out the Chevrolet Equinox by 2023. Production is to begin by November, the Unifor union said, and the plant will be Canada’s first to make electric commercial vehicles on a large scale.
The BrightDrop EV 600, partly developed and tested in Ontario by GM engineers in Markham and Oshawa, is aimed at the booming global market of so-called last-mile delivery vehicles.
GM’s Oshawa, Ont., plant is also undergoing a retooling, but one that will see it produce gas-powered Chevrolet Silverado and GMC Sierra pickup trucks to meet rising demand from U.S. consumers.
Additionally, Ford and Fiat Chrysler recently said they will begin making hybrid or electric vehicles at their Southern Ontario factories beginning in as early as 2024.
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