EV makers are on the brink of a price war, increasing the importance of keeping vehicle production costs under control. Ford on Monday cut prices on its Mustang Mach-E, following Tesla’s lead from earlier in the month. But GM said it had seen interest for its products, and while it will monitor the market, “right now we’re priced where we need to be”, Barra said.
GM will cut $2bn in costs over the next two years through attrition and limited hiring, chief financial officer Paul Jacobson said, adding that the carmaker was not planning lay-offs. Consumer demand for GM’s cars and trucks is holding steady, but “we want to be cautious” given a potential slowdown in the US economy.
GM on Tuesday forecast earnings before interest and taxes in 2023 ranging between US$10.5b and $12.5b, after reporting record operating income of US$14.5b in 2022.
Lithium Americas’ Thacker Pass mine is expected to begin production in the second half of 2026 and will generate enough of the silvery-white metal for up to 1 million EVs a year.
Despite being among the most lithium-rich countries in the world, the US has only one operational lithium mine, which is also located in Nevada. Thacker Pass has been opposed by conservation groups, and a district-court ruling is likely to decide its fate within months.
Lithium has risen to the top of automakers’ security of supply concerns for future EV production. The metal’s price has surged about 10 times since the start of 2021 because of shortages and developers have been struggling to bring new production online on time.
Ford, GM and Stellantis, the owner of the Jeep and Peugeot brands, have invested in or offered pre-financing to lithium, cobalt and nickel producers. The latest investment by GM, however, represents a significant escalation in the battle to secure battery metals and highlights growing integration between the automotive and mining industries.
The US Inflation Reduction Act, President Joe Biden’s flagship climate legislation, included tax credits for consumers on EVs that source their battery raw materials from the US and free-trade partner countries. That has added to the urgency for automakers to secure domestic supplies.
Jacobson said that while the company intended “to leave the mining to the experts”, its need for materials already exposes it to the resource industry’s risks.
“By partnering with [Lithium Americas], we think we can lower the risk to us,” he said.
The second tranche of funding will follow after Lithium Americas’ Thacker Pass mine has been separated from its Argentine businesses. The split is regarded by analysts as crucial for Lithium Americas to access US government funds because the mining company is partly owned by Ganfeng Lithium, a leading Chinese lithium producer.
GM shares were up more than 8 per cent in early Tuesday trading in New York.
Written by: Harry Dempsey in London and Claire Bushey in Chicago
© Financial Times
