- GM is discontinuing the Ultium branding
- The corporate plans to introduce new battery choices, together with a less expensive pack utilizing the LFP chemistry that is widespread in China.
- GM estimates the swap will contribute to a price financial savings of round $6,000 per car.
The race is on for reasonable EVs. Severely—nearly each automaker is hellbent on duking it out to get cheaper EVs on the highway, particularly to compete with cheaper Chinese language automobiles on America’s doorstep. It seems to be like Normal Motors might have lastly discovered a approach to reduce prices considerably on the most costly a part of an electrical automotive: the battery.
GM’s new Vice President of Batteries (a former Tesla exec), Kurt Kelty, laid out the technique for cheaper batteries at GM’s Investor Day. The takeaway? All new approaches to battery chemistry, packaging, and underlying methods to be able to slash as much as $6,000 in prices off of each single EV it produces.
The kick-off is saying goodbye to Ultium—each the Ultium branding and the present Nickel Cobalt Manganese (NCM) cells that it makes use of at this time. GM is as a substitute ushering in a brand new period of lower-cost Lithium Iron Phosphate (LFP) battery cells that it swears goes to be its secret sauce.
LFP is not essentially a brand new expertise, but it surely is considerably cheaper than what GM is doing at this time. The chemistry is extra secure, higher for the atmosphere by not using minerals like cobalt or nickel (each are supply-constrained and sometimes sourced unethically) and pretty cheap to provide.
Do not consider me? Effectively, there is a purpose that the now-discontinued Tesla Mannequin 3 Customary Vary and Ford Mustang Mach-E Customary Vary used these cells. I am going to allow you to guess on that one.
Now, positive, there are some trade-offs. LFP batteries do not provide the identical vitality density as present NCM cells, resulting in decrease total vary figures. In addition they do not essentially carry out as effectively within the chilly. However they’re adequate for many purposes, providing lots of of miles of vary at an reasonably priced worth. That is what issues right here. The logic right here appears to be: let’s get individuals into EVs first and then fear about efficiency. In spite of everything, ICE will nonetheless be round for some time.
And people automobiles that want the additional oomph? Effectively, GM is not abandoning NCM chemistry. The corporate will proceed to make use of NCM chemistry for the foreseeable future. So high-performance EVs and vehicles that want further vary and energy for towing needn’t fear—there are alternatives.
GM may also take a step again in its strategy to a “one-size-fits-all” battery. Whereas modularity undoubtedly performs an element in profitability, the automaker sees it as extra advantageous to tailor battery packs to particular person automobiles as a substitute. The trick is to maneuver from pouch cells to prismatic cells. The automaker says that this can permit for less complicated and cheaper pack manufacturing by slashing the variety of modules in every pack by as much as 75%.
Much less complexity, fewer prices, extra financial savings. That is the purpose.
I need you to essentially take into consideration what a greenback determine like $6,000 means. Whereas GM is bound to maintain a few of that cash to itself (it is out to make cash, in spite of everything), that is nearly the equal of the consumer-facing $7,500 EV tax credit score. Needless to say GM can also be reaping the rewards of the Inflation Discount Act’s 45X credit, which grants it $35 per kilowatt-hour for home battery cell manufacturing and $10/kWh for pack manufacturing. Each of these tax benefits will not be round perpetually, so automakers attending to equilibrium sooner means a greater probability for long-term, sustainable earnings.
It is a large shift, little question. GM is rethinking all the technique it spent so lengthy establishing. Rebranding, rearchitecting, and realizing that being aggressive means staying fluid. If GM needs to remain within the recreation whereas enjoying catch-up to Tesla as manufacturers like BYD breathe down its neck, it should discover methods to be extra reasonably priced and accessible. Cheaper batteries? That simply could be the way in which.
