CEO Mary Barra discusses GM’s shift to hybrids

WARREN, Michigan — In her 11th year as CEO of General Motors Co., Mary Barra’s latest test is to ensure that the Detroit automaker’s coming electric vehicles reach profitability by getting mainstream consumers to buy them in competitive global markets.

But in the time since GM first declared it would become all-electric, industry regulations have changed and the pace in the demand for EVs has slowed. Even though EV sales surpassed 1 million for the first time in 2023, data shows they are slowing quarter to quarter. First-quarter EV sales rose 2.6% year over year, but fell 15.2% from the fourth quarter of 2023, according to Kelley Blue Book.

GM now plans to add plug-in hybrids to its North American lineup to meet federal regulations that take effect in 2027. The U.S. Environmental Protection Agency in March revealed its final auto emissions standards that give automakers more time to increase EV production. The rules don’t require customers to buy EVs, but are a performance standard that allows automakers to determine their sales mix to comply with the greenhouse gas tailpipe emissions limits for light-duty vehicle fleets for model years 2027 to 2032 and beyond.

Barra, in an interview with The Detroit News last week, said the automaker now sees plug-in hybrids as part of the solution and expects them to arrive in North America in 2027.

GM isn’t backing down on battery electric vehicles. Chevrolet has started delivering the mainstream Equinox EV and the retail version of the Silverado EV to dealer lots. GM will have more affordable trims of the Equinox, Blazer and Silverado EV in the second half of the year, which is also when Cadillac will expand its EV lineup with the Escalade IQ and Optiq. The automaker is aiming to build and wholesale between 200,000 and 300,000 Ultium EVs in North America in 2024.

Barra also talked to The News about GM’s recent decision to downsize its Detroit headquarters by exiting the Renaissance Center, the automaker’s charging partnership with Tesla Inc., its autonomous vehicle company, Cruise LLC, and many other topics.

Editor’s note: This interview has been edited for brevity and clarity.

Question: Do you think it’s inevitable that Chinese EVs will come into the United States?

Answer: It’s hard for me to to know and say. All I know is because I take every competitor seriously … we’ve got to stay focused on being able to compete with anyone everywhere. And that’s what we’re focused on. We do have very strong brands. From a design perspective, getting a lot of very positive recognition on our designs, but then we’ve got to continue to really be relentless on taking cost out of our business because this is a very competitive business.

Q: You came out of the gate full BEV. Do you think you made the wrong choice there?

A: We never expected the adoption of EVs to be linear. Several years ago we said it’s going to depend on beautiful designs, the right range, the right technology, and the importance of the charging infrastructure, and then being the right price. I’m very proud of the Ultium-based EVs that we have that we’re launching right now. We’re seeing great success with the Lyriq, strong interest in many of the vehicles as they’re coming out. Can’t wait to get the Equinox out with some volume, as well as the Silverado EV, not only the work truck, but the retail RST version. We’re well positioned, whether there’s strong ICE (internal combustion engine) demand or strong EV demand because we’ve got really strong portfolios in both. For instance, Spring Hill (Manufacturing, in Tennessee), we have the opportunity to flex that plant between ICE and EV, so we can respond to the consumer.

Q: You’ve had some issues launching (EVs) and you have a lot of launches coming up here. Are you feeling like those issues are behind you now?

A: Absolutely. Last year, it really was starting brand new lines with a brand new supplier making (battery) modules. We’re a company that has a deep manufacturing background, but I think in hindsight, we should’ve had more focus on doing something that was relatively new for us with the cells but it’s behind us now, those lines have ramped, we’re right on schedule to what we said we’re going to be. It’s not an issue now. As we move forward, we’re going to build to demand. We now have the capability: Factory Zero (in Detroit-Hamtramck, Michigan) is up and running, Spring Hill is up and running, Ramos (in Mexico) is launching. With our EVs, we’re going to make sure we don’t overbuild and we manage our days supply because we think we’ve got desirable EVs, and we want to make sure we protect those vehicles from a pricing perspective, from a residual perspective, and not get into what’s happened in other regions and frankly, in some cases here, of the markdowns because that really impacts your residual value and it hurts the brand over the long period.

Q: Talk to us about hybrids. When can we see them and what will they be?

A: We haven’t announced specifically which ones but we’ve said in ’27 and we do see that hybrids will be part of the solution. I think how long hybrids will be part of the solution depends on how quickly we get a robust charging infrastructure. We’re working on that with many different groups, as well as our own investment. But hybrids will play a role. What has changed since we first said we’re gonna go directly to EV is the regulations have changed, and plug-in hybrids are an important part of meeting the regulatory space and giving consumers more options, so as the regulatory space evolved, it made sense for us to assess our strategy. As we’ve said, we’ve got the technology. We’re deploying it today in China. We actually had quite a few hybrids over the last several years, so we have the technology to pull on but as the environment changes, we’re adapting to it.

Q: If you had to it all over again, would you have made hybrids a part of your suite of technologies earlier, so you’d have them today?

A: When you’re making those decisions, you have limited capital to invest and you have limited engineering … what I’m very proud of is that we have the Ultium platform; many people are now working on what is their dedicated EV platform, because then they’re not going to have an EV that’s got a compromise as it relates to range or performance. With Ultium, we can control that. If I had the decision to make over again, I think the choice we made to invest early starting in 2018 and having a dedicated EV platform that spans all the way from an Equinox to a super truck like the Hummer, I think is the right long-term strategy. In a world of constrained resources, I think we made the right call and from a regulatory perspective, when we get to ’27, we’re going to be well positioned with the hybrids that we will be rolling out.

Q: Where are you in China? And is this company committed strategically to staying in China?

A: We think China is an important market, it has kind of stalled, but we still think there’s growth opportunity. Clearly the industry has shifted with the rise of EVs, and frankly I don’t think it’s sustainable when you have over 100 EV startups, domestic Chinese companies, with only a couple of them profitable. There’s got to be a sorting there. You can’t have a race to the bottom. I think GM can play especially with the strength of our Cadillac brand and our Buick brand. I think in some cases we were later than we should have been to get the right portfolio of EVs there. We’re launching an incredible amount of new energy vehicles, both hybrids and all-electric this year, so it’s an important year for us. The market shifted; we’ve got to respond to that. There’s been a growth of capability in the local OEMs that we respect, but I still think there’s a place for General Motors and our brands to be successful there. But anytime you have a market that’s got 100 new competitors, you’re not going to maintain share.

Q: How’s your relationship with UAW President Shawn Fain?

A: The team continues to build it. … I have a very constructive relationship with Shawn Fain. We don’t always agree on everything, but we talk about it. We still have the regular meetings that we used to have in the past. And I think we’re still getting to know each other. If you remember last year, he was named and then before it was a moment, we were in negotiations. I respect him. For our employees that are represented, they want job security, and they want to be compensated appropriately. And how do we do that in a way and make sure we’re here for the long term because a lot of people that work in our manufacturing facilities are very rooted to the local community, and we respect that. And so we need to make sure we have a strong business to be able to have appropriate wages and to be able to provide that job security.

Q: How do you prepare for kind of a diametric outcome to this presidential election from a policy standpoint?

A: We’re very much bipartisan. We work both sides of the aisle. A lot of the decisions we’re making right now will be (affected by) the next administration. And so we have to be constructive. We have to make sure they understand different decisions and the impact that has on jobs in this country, because I think where we all are aligned, regardless of who’s in office, regardless of what party, regardless of who’s controlling the House or the Senate, is we want to protect good-paying jobs in this country and support a thriving and growing economy. And so we’re going to continue to play our role and build the relationship and work with who’s ever in office.

Q: If you’ve made such multibillion-dollar bets, and then you have another administration that basically turns everything 180 degrees, what happens to that bet?

A: I’m biased, but I think we have one of the strongest ICE portfolios we’ve had in General Motors’ history along with a very strong EV portfolio, and we want to be customer driven. Even back, five, six, seven years ago, our goal was, “let’s make EVs that are so great people want to buy them.” It’s not a regulatory or a policy issue, it’s people buying what they want because it’s great. And I think if we stay focused on just doing great EVs that people want, and we support the infrastructure from a charging perspective, I think consumers are very smart and very rational, and EVs are fun to drive.