By John McElroy
1. GM Cruise is giving up on its Origin robotaxi, even though they’re tooled up and GM has built dozens and dozens of them. And it has to take a $600 million charge to write off its investment. No word yet where this leaves Honda, which was going to use Origin’s for autonomous ride hailing in Japan. Cruise will now pivot to using the next gen Bolt EV instead of Origins. GM CEO Mary Barra says they dropped Origin “to extinguish the regulatory risk.” Since the Origin doesn’t have a steering wheel or other mandatory safety items like turn signals, it doesn’t meet FMVSS regulations. She says they need a legislative change or some kind of government permission before it would become legal. That makes me wonder, do Tesla, Waymo and Zoox feel the same way? We should know soon enough.
2. GM is going to ramp up its marketing spend to the tune of $400 million in H2. It has quite a few new models coming out, especially EVs. Even so, its marketing spend is well below where it used to be as the company claims it’s getting more efficient on how it spends its advertising dollars.
3. EV production will hit somewhere between 200,000 and 250,000 in North American this year. And GM expects to achieve a variable profit with its EVs in the 4th quarter, once it gets over 200,000 units. It cut the cost of its battery cells by $30/kWh in the second quarter and expects further reductions in H2. Also, 54% of its EV buyers are new to GM’s brands.
4. GM will have to cut back production capacity in China as sales have plummeted compared to where they were a decade ago. Out of respect to its Chinese OEM partners, Barra will not divulge what their plans are. No doubt this is super sensitive. Could GM and SAIC be forced to close plants in China? One thing’s for sure, Barra indicates GM has no intention of abandoning the Chinese market, pointing out that it is a significant export hub for GM. And she sees opportunity with its Durant retail brand that sells high-end vehicles, like Suburbans and Corvettes that are imported from the United States.
