Gerald Johnson, GM’s executive vice president of Global Manufacturing, joined Yahoo Finance Live to discuss the company’s pressure for a fully electric future.
Video transcription
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SEANA SMITH: Let’s move on to Earth Week coverage now. Continue here at Yahoo Finance. And for that, let’s move on to Akiko Fujita. Akiko?
Thanks a lot for that, Seana. Now we focus on the transportation sector because [INAUDIBLE] for just over 30% of US emissions. However, one of the largest car manufacturers in the world is now making a bold commitment. General Motors recently announced a commitment to phase out all cars that use internal combustion engines by 2035. For much more on this plan, let’s bring Gerald Johnson. He is the executive vice president of global production. Gerald, it’s great to talk to you today.
You’ve definitely hit the ground running here with a number of electric vehicles already revealed. We have Cadillac, Hummer EV, Chevy Bolt updated. How do you get from now until 2035 in terms of production? What does this revision entail?
GERALD JOHNSON: Yes, thank you Akiko. First, we continue to do what we have done here. We announced our $ 27 billion investment and investment strategy to help transform it. This investment is, of course, towards the product. But it is also moving towards transforming our manufacturing operations to build an EV portfolio. The main examples, I think, are our Factory ZERO operation that we have in restarting children to run EV Hummer and also the cruise product, which is an EV AV product that we will bring there.
And I just announced the Silverado truck. So we bring new products. And we make sure that all these products cover the range of market segments as we move into the future.
AKIKO FUJITA: So let’s talk about the production review there. You mentioned the ZERO Factory, 4 and 1/2 million square meters here, in which you are essentially rebuilding the factory in order to be able to configure the electric vehicles. What does this mean, the number one from the point of view of employees, the number of employees, but also only from cars, the assembly line? I mean, walk us through the specific.
GERALD JOHNSON: Sure. So you’re exactly right. 4 and 1/2 million square meters start with the complete clearance of the place. And that’s what I did. And I am literally referring to an open-air football field, which now allows us to remake all the technology that goes into that factory for the comfort needed to make an EV product for wedding stations, for a new painting operation, and for self-assembly. battery work.
To do this and also to add all the technology that will allow it to also be one of the most automated and technologically competitive plants, what we do in Factory ZERO and what we will repeat in our factory in Spring Hill, Tennessee, where Lyriq, the new Cadillac we just announced and showed today, will be built there and where we’ve already done a lot of work and learned a lot about how we made the product Bolt in our Orion facility here just outside Detroit.
So these are the pieces. And all this means that we are able to bring our employees with us. Factory ZERO will have more employees when we are back in business than it had before. Not to mention, what do we do with the addition of battery facilities. We also do cell production at the Lordstown location and recently announced another location in Tennessee.
We need to have vertical product integration so that we can be confident that we can live up to our commitment to not have exhaust pipe emissions by 2035 and to be carbon neutral by 2040.
AKIKO FUJITA: So, let’s talk about that vertical, then. Because at the end of the day, the big question here is, how do you make electric vehicles accessible? You look at the market right now, about 2% of the market EV, much of it is Tesla. There are certainly not many drivers who can afford Teslas if you talk about the possibility of doing so on a larger scale. How do you receive the purchase from the customer?
GERALD JOHNSON: Right. So the purchase really comes through experience. I think that, in general, the client is aware. I think the client understands the importance of climate change. I think there is great interest [AUDIO OUT] experience, however. Not enough people have experienced another EV product.
We are offered this opportunity. You mentioned the cost. So the Bolt EUV is a $ 32,000 vehicle, which is below the average transaction price of vehicles sold today that are internal combustion engines. The key, of course, continues to work with battery technology. No pun intended, the power of this vehicle is also where we apply the greatest innovation to increase energy density. So, we think we’ve gotten the anxiety out of the table. Our Altium platform can produce over 450 miles of electrical performance.
So this was one for the customer. The second, of course, is the cost. Now we see our way down to reduce the cost of a battery by 60%. And so we’re on that cost curve. And that will allow us to continue to value and offer vehicles across the entire segment, from smaller to medium SUVs, to large trucks, to EV Hummers and Cadillacs. So this is the third piece. The last piece is fast loading. And there we continue to innovate.
We believe that when we deal with these things, our market research tells us that we are improving those elements that customers are interested in and willing to transfer to an EV product.
AKIKO FUJITA: I wonder if you can talk about the competitive landscape here. There are a number of companies that have entered the EV space. Definitely a very crowded one. If you even look at companies like Rivian or Lordstown Motors, how many of these companies do you think actually survive? Is it possible to see a significant consolidation?
GERALD JOHNSON: I would venture to say yes, that there is not enough space for all those interested. But I would not want to predict who will succeed and who is nothing more than to say that General Motors will be there and intends to be a leader in that space. But I think the interesting thing is that everyone is feeling the transformation of our industry. So if you go back 100 years ago, when we went from horse and buggy to internal combustion engines, it’s kind of a transformation.
And then, at that time, we had literally dozens of manufacturers trying to make their mark in that domestic combustion industry, the automotive industry. And we see it again in EV. We believe that we bring a special capacity, our supply network, our dealer network, our 100-year production capacity and a lot of innovations from my engineering organization.
AKIKO FUJITA: Gerald Johnson, Executive Vice President of Global Production for GM. Appreciate the weather today. Thank you very much for joining us.