GM will start making money from electric vehicles this year, according to the CEO

Tesla currently sells the most electric vehicles in the USA – and has been making a profit on that alone since 2021. The second-largest electric vehicle maker in the country is Ford, but it posted losses of more than $1 billion in the first two quarters this year on its Model e electric vehicle division. Other pure EV providers like Rivian and Lucid don’t make any money from their vehicles and are holding on thanks to outside investors.

Demand for electric vehicles is still increasing, but the growth rate in the U.S. is fluctuating, prompting manufacturers to change their electric vehicle adoption strategies and include more hybrid vehicles in the mix. A major obstacle to electric vehicles is their high cost, but customers can receive tax incentives of up to $7,500 from the federal government to help with their purchase. However, the credits only apply to domestically built electric vehicles with strict rules on vehicle pricing and battery materials sourcing – rules aimed at staying competitive with China, which is building more electric vehicles at cheaper prices.

Currently, only a handful of vehicles manufactured by GM, such as the Chevy Equinox and Blazer EV, are eligible for incentives, but the company is investing to lower battery prices and preserve these tax incentives for consumers. One of GM’s big new plans is to open a new battery cell development center in 2027 in Warren, Michigan. GM is also building a new $3.5 billion electric vehicle battery plant with Samsung SDI in Indiana and another with LG in Lansing, Michigan. GM and LG have also increased production at currently operating plants in Spring Hill, Tennessee and Warren, Ohio.

Accordingly The New York Times, Thanks to the Biden administration’s Inflation Reduction Act, GM will receive about $800 million in subsidies from the government to produce electric vehicle batteries in the United States.

GM also plans to reduce battery costs by installing lower-cost lithium iron phosphate (LFP) batteries in future electric vehicles, as Tesla and Ford are already doing. The chemistry generally results in a lower overall range of electric vehicles after a full charge compared to the more expensive nickel-cobalt-manganese (NCM) batteries that GM installs in most of its current electric vehicle models.

However, GM doesn’t expect its range to suffer significantly: All GM electric vehicles today have a range of about 300 or more miles, says communications vice president Darryll Harrison The edgeand it expects the larger LFP vehicles to have a range of “over 350 miles.”

GM has one of the cheapest electric cars on the market, the Chevy Equinox, which costs less than $30,000 after tax credits. For those interested, there’s no Apple CarPlay, but neither is Tesla, which sells the wildly popular Model 3 sedan for about $35,000 after incentives.