General Motors revealed plans on Monday to develop 20 new electric and fuel cell vehicles by 2023. While the automaker is best known for pickups and sport utility vehicles, GM is betting that future regulations and market demands will require a diverse lineup of zero-emission vehicles.
GM joins European automakers like Volvo, Daimler AG, Volkswagen AG, and BMW AG in a big push to electrify their vehicle lineup. European automakers are scrambling to meet increasing emissions regulations. The United Kingdom and France have pledged to ban diesel vehicles by 2040, and other countries are poised to follow. While GM has pulled out of the European market, they are still facing regulatory pressure from China. China is a surging market for the automaker, growing by over ten percent year over year. While Chinese consumers are happy to buy gas-guzzling SUVs and luxury sedans so far, the Chinese government is desperate to improve air quality and is mulling a ban on internal combustion engines by 2030 or 2040. Even if an outright ban doesn’t come into effect, China wants electric and hybrid vehicles to make up at least a fifth of auto sales by 2025. Eager to head off any regulatory challenges in China, GM CEO Mary Barra has promised at least 10 electric and hybrid cars for the Chinese market by 2020 and the company will open a battery plant this year with Chinese partner SAIC Motor Corp.
The most surprising part of the automaker’s strategy is a renewed commitment to fuel cell vehicles. The manufacturer revealed a prototype of a hydrogen-fueled platform called “SURUS” on Monday. To date, only Honda and Toyota have developed consumer vehicles using hydrogen fuel cells for sale in California. Most commentators consider battery electric vehicles to be the more promising candidate for mass market success but, bolstered by profits from traditional engines, it seems GM is willing to test FCV technology if battery prices remain high and they need an alternative powertrain sitting on the shelf. Frankly, a significant investment from GM might breathe new life into hydrogen infrastructure.
If they deliver on this electrification strategy, GM is better positioned to accommodate tough emissions regulations and springboard from the U.S. market to global success. GM’s major investments in China demonstrate that the U.S. can’t opt out of the global race for electrification without losing access to research and development opportunities and green jobs. Whether U.S. regulators like it or not, electric cars are coming. Right now, the only real question left is whether they arrive from China or Germany.