General Motors may not have jumped into electric vehicles (EVs) as fast as rival automaker Ford, but it is doing its best to catch up. Ford has been making waves with its F-150 Lightning electric truck, but GM’s new Chevy Silverado EV is now competing in the market. A second area of competition is opening up around producing the heavy-duty batteries needed to power these electric vehicles. A recent news report says that GM is looking to build its EV batteries in the United States rather than import them, which is a major win for American labor and consumers. This would put both Ford and GM as domestic producers of their EV batteries.
Domestic production of EV batteries is a big deal, as geopolitical rival China has recently become a global leader in EV technology. Both the U.S. and Europe have sought to protect their domestic automakers from stiff Chinese competition, which some analysts say is unfairly aided by the Chinese government in the form of generous subsidies. With GM deciding to make its own EV batteries in the United States, the two largest all-American automakers are showing that they are willing to compete head-on with a new automaking giant. The GM battery plant, which appears to be created in collaboration with South Korean tech giant Samsung, will create an estimated 1,600 jobs in Indiana.
Switching From Gas to Electric
Many consumers today are debating the merits of electric vehicles and trying to decide whether their next new car should be electric. Electric vehicles hitting the market have proven themselves fast and powerful, erasing concerns that they would be akin to oversized golf carts. However, a lingering major concern for consumers is range: will new EVs have powerful enough batteries to get them to their destination without needing to recharge. Many smaller cities and towns lack superchargers that can quickly recharge EVs, meaning drivers have to more slowly recharge their vehicles overnight to ensure a full charge.
In addition to concerns about range, consumers are also wary of the high cost of replacing EV batteries. While EVs may have fewer moving parts that can break compared to a fuel-powered vehicle, their batteries are extremely expensive. However, if both Ford and GM have domestic factories turning them out, the increased supply will lead to a lower price. As the price of EV batteries drops, more consumers will be willing to make the switch from gas- to electric-powered vehicles.
Automakers With Best Battery Supply Will Win Big
If something bad happens to your vehicle, you want to be able to fix it quickly and at a reasonable price. GM having a steady supply of EV batteries will help make reasonable-cost repairs of its electric vehicles a reality. Under both the Trump and Biden administrations, imported EV batteries from China have been vulnerable to tariffs, making it more expensive to replace batteries with imported ones. When Ford and GM both can easily supply replacement EV batteries to the market, few consumers will want to buy an imported electric vehicle, benefiting American labor.
