- 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 as excessive as $6,000 from one EV technology to the subsequent.
The race is on for affordable EVs. Critically—nearly each automaker is hellbent on duking it out to get cheaper EVs on the street, particularly to compete with cheaper Chinese language autos on America’s doorstep. It appears like Basic Motors might have lastly discovered a technique 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 in an effort to slash as much as $6,000 off of each single EV it produces from one technology to a different.
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 as we speak. GM is as an alternative 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 know-how, but it surely is considerably cheaper than what GM is doing as we speak. The chemistry is extra steady, higher for the atmosphere by not using minerals like cobalt or nickel (each are supply-constrained and infrequently sourced unethically) and pretty cheap to supply.
Do not consider me? Effectively, there is a purpose that the now-discontinued Tesla Mannequin 3 Commonplace Vary and Ford Mustang Mach-E Commonplace Vary used these cells. I will allow you to guess on that one.
Now, positive, there are some trade-offs. LFP batteries do not provide the identical power density as present NCM cells, resulting in decrease general vary figures. Additionally they do not essentially carry out as effectively within the chilly. However they’re ok for many purposes, providing a whole lot of miles of vary at an inexpensive 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 autos 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 vans that want further vary and energy for towing needn’t fear—there are alternatives.
GM can even 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 autos as an alternative. The trick is to maneuver from pouch cells to prismatic cells. The automaker says that this may enable for easier 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 objective.
I would like you to essentially take into consideration what a greenback determine like $6,000 means. Whereas GM is certain to maintain a few of that cash to itself (it is out to earn cash, in spite of everything), that is nearly the equal of the consumer-facing $7,500 EV tax credit score. Remember that GM can 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 eternally, so automakers attending to equilibrium sooner means a greater probability for long-term, sustainable earnings.
It is a massive shift, little doubt. GM is rethinking the complete technique it spent so lengthy organising. 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 inexpensive and accessible. Cheaper batteries? That simply may be the way in which.