G.M. Strategy

"The heart of the strategy is a battery pack design that G.M. has engineered over the last five years. Its packs, marketed under the name Ultium, are made up of Lego-like battery modules that can be combined in different sizes and used in any G.M. vehicle, from a compact car to a full-size pickup. Since the modules all use the same parts, G.M. believes it will reap great economies of scale that will drive down its costs and give it an advantage over other automakers.

While working on its Ultium design, G.M. also started building four factories with a partner, LG Electric, to churn out battery packs in mass quantities and at lower costs. It has also started retooling assembly plants to make vehicles with Ultium packs.

Ms. Barra noted that most E.V.s sold in the United States last year were luxury models purchased by people who owned at least two vehicles. G.M.’s current offerings are of that type. They include an electric GMC Hummer pickup that sells for about $110,000 and a luxury sport-utility vehicle, the Cadillac Lyriq.

“If you want E.V.s to get to 100 percent or even 50 percent of the market, there have to be affordable E.V.s,” she said. “You’ve got to provide entry models in that space.”

G.M. has a lot of ground to make up. Tesla has been assembling its own battery packs for years and has achieved significant economies of scale. Ford took a quicker route to get its electric truck, the F-150 Lightning, into production. It buys the truck’s battery packs from a supplier, SKI, and puts them into a modified version of the gasoline-powered F-150. By moving quickly, Ford essentially has the electric pickup market to itself for now.

Ford is also working on its own modular battery design, dedicated E.V.s (that is, not re-engineered internal-combustion vehicles) and battery plants, and is lagging G.M. on that front. Ford has made plans to build two battery plants in Kentucky and one in Tennessee, but it won’t start production for about two years. And before it can start making E.V.s with those batteries, it will have to retool assembly plants to produce them.

“It gets expensive in terms of capital every time you retool plants,” said G.M.’s president, Mark Reuss.

To ensure that a second wave of E.V.s could generate profits and reach volume sales, Ms. Barra’s executive team concluded that the company could not make compromises as it did with the Bolt. Their aim was for the company to build E.V.s from the ground up, find cost reductions and manufacture the battery packs itself. G.M. has estimated that the Ultium design will cut the cost of battery packs by 30 percent."