Live Wire

GM’s Mary Barra is trying to figure out how to sell electric cars in Trump’s America. 
By David Welch

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Episode Transcript

Speaker 1 (00:00):
Live wire. GM's Maribara is trying to figure out how
to sell electric cars in Trump's America. By David Welch,
read aloud by Mark Leedorf. The Oltium Cells factory outside
Nashville spans five football fields and runs twenty four seven,

(00:21):
cranking out five thousand finished battery cells an hour. The
site and a sister plant in Ohio are co owned
by General Motors and South Korea's LG Energy Solution, and
together they can make enough cells to build a new
electric vehicle nearly every minute, most of them GM cars.
Although the plants aren't near full capacity, they already produce

(00:43):
more cells than Tesla does in North America. Inside the factory,
fewer than two hundred and fifty workers on the day
shift are watching computer screens or monitoring a network of
chemical mixers, coating machines, and drying ovens that brew the
essential ingredients of a battery and slather the resulting slurry
onto rolled up metal sheets. The sheets are then cut

(01:05):
and stuffed into pouches, which will serve as the battery
cell and are set to cure at about one hundred
and forty degrees fahrenheit. Later, a system of shelves, moving up, down,
and side to side stacks. The cells, each long and
slender like a giant envelope, on blue racks forty feet high.
In this rick house for high tech spirits, the cells

(01:26):
go through a sort of fermentation process known as finishing,
that lasts ten days. Once the cells are ready, they
are loaded onto trucks and transported down the road to
an assembly plant where GM used to build saturns in
the nineteen nineties. Now its all electric catillacts, alternating with
gasoline powered models. On the line. In the battery assembly area,

(01:48):
twelve employees tend to the ninety three robots on the floor.
There used to be eighteen humans in this role, but
GM figured out how to replace some of them, in
part with cameras and artificial in dat intelligence that can
do quality checks. Josh Tavel, head of Project engineering and
Manufacturing at GM, is proudly surveying the photos captured by

(02:09):
those cameras on a monitor. This plant is ridiculously automated,
he says, production tilted in favor of EV's in March
when the plant started making the new electric Cadillac Vestique,
which GM engineers call the Baby Escalade. As cars roll
down the line. Workers in bright orange and yellow vests

(02:30):
install cables and hoses by hand. If the market wants
more evs, we can make them, Tavel says. This hive
of activity was built to fulfill Mary Barrow's great hope
to electrify GM. After an entire career at the automaker,
from inspecting fenders and hoods at the age of eighteen
to spending the last eleven years as chief executive officer,

(02:52):
Bara has staked her legacy on eve's. Her bet has
gotten riskier over the past year, first due to a
slow down in EV sales and then the return of
Donald Trump and his tariff regime. Those factors encouraged other
car makers to hedge their bets on EV's by shifting
more production back to gas cars or to hybrids. Bara

(03:14):
has mostly stayed the course. She's hired Tesla veterans to
make GM's battery capabilities more competitive with those of Elon
Musk's company and surging upstarts from China, and she's taken
steps to slash costs, working toward what the company calls
its low cost EV architecture. As part of those efforts,
GM is breaking ground in Indiana on a new battery

(03:35):
plant slated to open in twenty twenty seven, and has
made investments in US based mines for lithium and other minerals,
with the goal of one day forming a nationwide or
to assembly supply chain similar to the one byd Has
in China. By the end of the year, GM will
resurrect the Chevrolet bolt A budget Compact starting around thirty
thousand dollars, joining a dozen other EV models all ready

(03:59):
for sale at dealership, including five family friendly SUVs, two
pickup trucks, two hummers, and the ultra expensive Cadillac Escalate IQ.
Where about giving customers choice, says Bara. Over the long term,
we think EV demand will grow. The more immediate challenge
is figuring out how to sell an electric car in

(04:21):
Trump's America. The president has vowed to wipe away major
elements of Joe Biden's Inflation Reduction Act or IRA, such
as one that gives consumers tax credits for new or
least evs and another that pays automaker's credits for building them.
GM gets at least eight hundred million dollars a year
from this program, subsidies that were designed to chip away

(04:43):
at the cost advantages of gas cars. The Trump administration
is holding up three billion dollars earmarked for public charging infrastructure,
and on April third, a twenty five percent tariff went
into effect on imports of assembled vehicles. GM depends on
a global star apply chain, and Trump has been waging
a trade war with nearly every single country. The two

(05:05):
most affordable evs in GM's current lineup, the thirty five
thousand dollars Chevy Equinox and larger Blazer, are manufactured in Mexico,
and most of them are brought in over the border
to be sold to Americans. GM is on the hook
to pay the new tariff on the foreign parts in
all cars that come across the northern or southern borders,
a twenty five percent tax on other components starting in May,

(05:29):
and one hundred and forty five percent on the materials
it ships in by boat from China. Trump's so called
reciprocal tariffs would have made things even worse, and his
retreat on April ninth, along with comments he made the
following week about giving automakers a possible reprieve, gives GM
executives and lobbyists hope that he could change his mind
on car tariffs too. The duties that remain in place

(05:52):
substantially raise the wholesale cost of automobiles and many other things.
When the price of goods goes up and stocks go down,
as is happening now, that leaves less disposable income for
people to make big purchases, and less profit for auto
companies like GM, which needs to sell high margin trucks
and SUVs to cover losses on evs. On top of

(06:14):
all that, Trump's rhetoric is just about the worst marketing
EV's can get. In October, he told the Detroit Economic
Club that electric batteries make vehicles too heavy, don't offer
enough range, and overload the grid. He also stoked class warfare,
suggesting automakers had raised the price of gas cars to
fund their EV plans. That's partly true, Kamala gives rich

(06:39):
people seventy five hundred dollars tax breaks to buy luxury
electric cars, he said. Since then, the only evs Trump
has shown an interest in promoting are the electric cars
that Musk makes with or without Trump's support. GM executives
say electricity simply makes for a better car and represents
the future of transportation. They drive faster, more smoothly and,

(07:03):
as Barra points out, never require a trip to the
gas station. The roadblocks for consumers, she says, are insufficient
access to charging stations and most important, the sticker price.
Batteries are key to solving the cost equation. According to Barra,
there has to be more of a charging infrastructure, there
has to be more choice at the lower price points.

(07:24):
I think it will happen over time, she says, core
battery technology will continue to get better. We'll be right
back with live Wire. Welcome back to live Wire. GM
developed what was essentially the world's first modern all electric

(07:45):
car in the nineties. At the time, Barra, a trained
electrical engineer, was working as an executive assistant to GM's
then chairman Jack Smith and was on the company's fast
track to management. GM's EV one didn't last long enough
to attend Borrow's rise in the ranks. Although the car
received rave reviews from drivers who could envision the technology's potential,

(08:07):
the company ended up losing one billion dollars on the
project and pulled the plug in two thousand and three.
Tesla was founded that same year. By the time Bara
took over as CEO of GM in twenty fourteen, becoming
the first woman in charge of an automobile company. She
could sense that Tesla was becoming a serious threat. In

(08:28):
twenty eighteen, she hatched to plan with Mark Royce, now
the company's president, to push harder into evs by investing
in the battery design that would become Ultium. The idea
was to use the same battery cells and modules for
every model of the company's evs, all developed in house.
This was a big deal. With gas cars, GM builds

(08:50):
a different combustion engine for each category of vehicle at
a cost of more than two billion dollars apiece. With
one system for every electric car, development of new EV
models could be dramatically cheaper over time. Government subsidies, such
as the ones lawmakers would later bundle into Biden's IRA,
didn't factor into the equation. Royce says this whole business

(09:13):
and strategy was planned without any IRA benefit. He says
he notes that other countries are still investing in clean
transportation and mandating it, but acknowledges the difficulties in Washington.
The regulatory environment is not going to get better, he says,
sitting in a conference room at GM's global Technical Center
north of Detroit. Kicking the can down the road and

(09:36):
hoping for different legislative and greenhouse gas rules happening is
a pretty tough way to play the business. If Bara
is feeling contemplative, she'll tell you that electricity is the future.
She considers it a corporate imperative. The Chinese government has
lavished about two hundred and thirty billion dollars in subsidies
on its domestic auto industry. Even if tariffs and import

(09:59):
restrictions keep Chinese cars out of the US, BYD is
eating away market share in Mexico and South America, which
are both strong markets for GM. We don't necessarily have
a level playing field as we look at some of
the competition globally, Barra says, give us a level playing field,
and we're going to compete. Futurism isn't really Barra's thing, though,

(10:22):
above all, she's a pragmatist. She recognizes EV sales growth
in the US has been slowing at an alarming rate,
from fifty percent in twenty twenty three to seven percent
last year. Besides Tesla and Hundai, no major automaker was
as committed to selling EVS in the US as GM
and the rest all hit the brakes. Honda says it

(10:44):
remains committed to electrification, but has abandoned a joint venture
with GM to build affordable evs. Ford is retooling a
planned EV assembly line in Canada to build gas pickup trucks.
Toyota is more focused on hybrids. GM is eight years
and thirty five billion dollars into its EV transition. Barra

(11:06):
has taken in whatever slack she could in GM's EV timeline.
GM canceled a Buick EV, shelved concepts for a mid
size electric pickup and a Corvette inspired crossover suv postponed
until next year, the opening of a factory in suburban
Detroit that will increase production of electric pickups, and sold
its steak in a planned ultium battery plant in Lansing,

(11:29):
Michigan to LG. But GM is in too deep to
make a habit of such cutbacks. Barra knows she has
to make this work regardless of the changing political wins
in Washington. When you look at what General Motors has
been able to do, whether it's managing through COVID, managing
through the semiconductor shortage, she says, we are incredibly well

(11:50):
positioned to respond to whatever happens. To help plead her
case to Trump on tariffs and other matters, GM has
hired consultants Arthur Schwartz, political adviser to Donald Trump Junior,
and J. D. Vance and Jeff Miller, who advised former
House Speaker Kevin McCarthy and fundraised for Trump's twenty twenty
four campaign, say people familiar with the matter who ask

(12:12):
not to be named because the information isn't public. Barra
has had several of her own meetings with the President
in person and by phone, sometimes joined by top executives
from Ford Or Stilantis, the multinational owner of Chrysler and Jeep.
Of the two point seven million cars GM sells in
the US annually, one point two million are imported. The

(12:33):
tariffs are a huge problem for the company, but Barra
and her team aren't particularly eager to talk about them.
We look at tariffs, we look at EV regulations, we
look at the market changes, and just say, you know,
there are challenges that we've got to figure out, says
Paul Jacobson, the company's chief financial officer. Trump hasn't made
his move on EV tax credits yet, but it's probably

(12:56):
coming soon. John Barrasso, Senator from Ye, proposed an immediate
repeal of the tax credits with a bill called the
Eliminating Lavish Incentives to Electric Vehicles Act, sassily nicknamed the
Elite Vehicles Act. He has eighteen Republican co sponsors, but
only one, Mike Braun of Indiana, has EV projects in

(13:18):
his state. GM's lobbying staff has been spending a lot
of time with GOP lawmakers. It's pressed Congress members to
phase out EV tax credits over several years instead of
all at once. More surprising, GM has lobbied to restrict
or eliminate credits for Americans who lease, say people familiar
with the conversations who asked not to be identified because

(13:40):
the meetings were private. Whereas credits for eligible purchases of
evs apply only to cars assembled in North America, less
have no such limits. Undoing this loophole would hurt GM,
but it had harmed the company's foreign competitors even more.
The automakers need only three Republicans in the House to
vote the way they want to preserve some version of

(14:01):
the tax credits. It's no coincidence that automakers put a
lot of their EV plants in Red States Georgia, Kentucky,
South Carolina, and Tennessee each employ at least thirteen thousand
workers in the battery and vehicle supply chain, according to
data from EV Politics Project, a right leaning think tank.
Bernie Moreno, a Republican senator from Ohio, has met with

(14:25):
Bara or her staff on numerous occasions. GM's first Oltiam
plant is in northeastern Ohio, and Honda is building a
battery plant near Columbus. We have engaged with GM more
than any other car company. Moreno says, we have to
be thoughtful and get EV subsidies wound down in an
orderly way. How do you do it in a way

(14:45):
that's the least destructive. When Borrow really wants to make
an impression, she arranges a tour of the design studio
at GM's technical center in Warren, Michigan. It's Mike Simcoe's
job to host the VIP tours. Simcoe, a tall, stately
ausy with a linenesque beard, is GM's senior vice president

(15:06):
for global Design. His studio has a section for each
GM brand where designers dream up and craft their vehicle concepts. Here,
computer renderings become clay or foam models, which are then
sculpted by robotic arms, and once painted, could be mistaken
for real cars. As Simcoe ambles by robots are shaving

(15:27):
off bits of brick red clay from a model that
might be the basis for a future SUV. Kurt Kelty
got the tour in twenty twenty four. GM had made
several attempts over the years to hire Kelty, a former
senior director of battery technology at Tesla who helped set
up the automaker's famed gigafactory in Nevada. He'd rebuffed the

(15:47):
company's job offers, saying GM wasn't serious about EV's and
was only putting out some models to meet regulatory requirements.
I responded with all the reasons why I don't want
to join GM, he recalls, I thought it was all
smoke and mirrors. After Tesla, Kelty worked at a pair
of startups and hoped to turn GM into a customer

(16:07):
of his company's silicon node battery components. Instead, he got
an invitation to meet Simcoe, who showed him a cornycopia
of EV models in the design studio, including low cost
concept cars and a GMC crossover. What really turned Kelty's head,
Simcoe says, was an internal design study of GM's low

(16:28):
cost EV architecture. It's a foundation containing all the battery
and cost improvements GM is working on for future models.
It's the key to creating smaller and cheaper evs, says Simco,
who set to retire in July after forty two years
at GM. We haven't slowed down at all, he says.
You can't afford to walking past more car models. Simcoe

(16:52):
stops at a concept called the fun Bolt, a small,
sporty looking crossover. Is it the yet to be unveiled
Bolt that GM has said it will bring out this year?
Simcoe demurs and moves the tour long. The next stop
is a foam model of a small white sports car
with red racing stripes running up the hood. It looks
as if it could be an electric replacement for the

(17:13):
now defunct Camaro. Kurt fell in love with that one,
Simcoe says he was giddy. Simcoe's design tour really did
seal the deal. Kelty agrees. He joined in February twenty
twenty four as Vice president for battery, Propulsion and Sustainability,
sufficiently convinced GM had gotten the religion of clean cars.

(17:34):
His success at GM is largely measured in cost reductions.
GM slashed the cost of its battery packs last year,
Kelty says, mainly because of increased sales volume and improved
production yields at the cell plants. Today, the pack for
a Chevy Blazer or Equinox EV costs about thirteen thousand
dollars according to research firm cru Group. That's about five

(17:56):
times more than a gasoline engine and transmission. GM's target
is to knock off ten thousand dollars from some of
its EV's, but Kelti has a long way to go
before they can match their gas counterparts. Kelty's longer term
solution is to take a different approach to batteries. Currently,
GM and LG use a mix of lithium, nickel, manganese,

(18:18):
and aluminium in their oltium cells. The cells are stacked
and stuffed into boxes known as modules. Two dozen cells
make a module. Ten modules make up the battery pack
for an entry level Blazer or Equinox. The separate modules
are necessary to protect the cells, but they also add
significant weight. At Tesla, Kelti used cylindrical cells, sort of

(18:41):
like wrapping all the components into jelly rolls and encasing
them in steel. The cylinders are partitioned by foam, and
the single metal casing eliminates the need for separate modules.
The cylindrical shape isn't as space efficient as oltiums, but
it makes the pack much lighter and lighter cars require
less energy to move. In the years since Kelty helped

(19:01):
develop Tesla's approach, his attention shifted to a third way.
Prismatic cells, contrary to their name, aren't shaped like prisms.
They're like bricks, which have the benefit of stacking neatly together.
They're encased in metal, offering structure without requiring individual modules.
They're light and space efficient, the ideal combination. Kelti says,

(19:24):
GM signed a deal to purchase its first batch of
prismatic cells from Samsung SDI and will develop its own
version of the technology with LG. Over time, GM will
convert more of its batteries to prismatic Kelti says the
beauty of prismatic cells is that we can reduce the
part count by about fifty percent. He says, you reduce

(19:44):
your labor, you reduce your initial investment. Overall, you just
get a massive price reduction. Using different battery chemistries can
also lower costs, and for that reason, GM is incorporating
lithium iron phosphate cells into some cars. This is the
same kind of battery byd uses. They store less energy
than traditional lithium ion batteries, but they're cheaper. GM will

(20:08):
use them in this year's Bolt and a version of
its Chevy Silverado pickup. Instead of four hundred and ninety
miles a charge, the truck will get three hundred and fifty,
Kelty says, but it will be six thousand dollars cheaper.
As he borrows one idea from a Chinese rival, Kelty
is trying to make GM less reliant on foreign goods.

(20:28):
EV batteries require graphite, and ninety percent of it comes
from China. Kelty wants to eventually switch from graphite to silicon,
which can be sourced within the US. It'll require significant
upfront investment in the short term, but especially in the
age of tariffs, could bring costs down in the long term. Surprisingly,

(20:50):
GM's EV's may be getting some help from Musk. His
alliance with Trump seemed at first to be a disaster
for GM, but the political activism backfired for his car
company Global Tesla sales fell last year for the first time.
The resale market is flooded with used Tesla's, and the
stock is down more than forty percent since Trump's inauguration.

(21:13):
GM meanwhile went from six percent of EV market share
in the US at the beginning of last year to
twelve percent by the end. It's EV sales doubled in
twenty twenty four and maintained nearly the same pace in
the first quarter of twenty twenty five. Executives regard evs
as a big opportunity to introduce GM brands to drivers
who never would have considered them before. Cadillac and Chevrolet

(21:36):
tend to be weak on the coasts, where EV sales
are strongest. More than sixty percent of the company's EV
customers have never owned a GMCR before, says Tavel, the
project engineering head. If GM can get the cost of
its evs closer to that of gas cars, sales will
take off. He says, you really want to grow, That's
where it is. He says, why in the hell wouldn't

(21:59):
you be as agressive as you can be right now
capturing that customer base. In the end, this is going
to pay out one reason to not be so aggressive.
After factoring in development costs, GM loses money on every
EV it sells. The category drained four billion dollars from
the company's profits last year. Jacobsen, the CFO, says he

(22:20):
expects the company to reduce half of that burden this year.
Tavel is confident that GM can lower those costs, and
his team is looking at everything. Back at the Oltiam
plant in Tennessee, table pauses to inspect a battery pack
sitting on a table. This one is designed for the
lyric An suv that, along with the Vestique and the

(22:41):
two Chevy models built in Mexico, came out of the
company's first real effort at mass market EV's. The cars
were engineered in a hurry, and as a result, there's
plenty of excess to be trimmed. The battery pack has
two bolts right next to each other, one that fastens
an orange high voltage cable to the pack and another
that helps hold the pack to the metal frame. If

(23:03):
the two components were arranged a little differently, one bolt
could hold it all together. That would save money and
the labor needed to screw in the extra bolt. The
electrical guy didn't talk to the assembly guy. Tavel says,
it burns my ass. That'll be fixed. The lyric has
been in production for three years, and in that time

(23:23):
GM has figured out how to cut four hours from
its assembly time. It can fully finish a vehicle in
twenty nine hours, says Anton Busstil, manager of the Tennessee plant.
Wheel entire assembly is fully automated, as is some of
the seed installation. Some other plants do those things manually.
Further up the assembly line, a burly bearded man named

(23:45):
Larry Morgan installs different sets of hoses or cables depending
on the type of vehicle, gas or electric that arrives
at his station. Management has made clear to him that
the evs are very important to the company. He says,
if there the future, we're hoady for them.