Reference no: EM132401649

Conduct a brief SWOT analysis on GM's strategy. What is your point of view on the timing of EV's acceptance?

"It becomes pretty clear that to win in the future, you've got to win with electric and driverless vehicles. This is the future of transportation," says Mary Barra, CEO of GM, in the Businessweek (Sept. 23, 2019) cover story.

Taking vast resources from businesses that make money and moving them toward businesses that (so far) lose mountains of it is a very risky bet. But the real gamble is timing. GM, which is pushing hard into electrics and autonomy faster than any other carmaker, could be blowing cash for years before there's any payoff. Already, its Cruise Automation unit has postponed plans to deploy autonomous cars this year. If driverless and EVs take off more slowly, then GM will have prematurely jettisoned thousands of skilled veterans and killed off its smaller gasoline models. Worse, it could cede a chunk of profits from the remaining decades of the internal combustion era.

Barra is adamant that GM will sell a million EVs a year in the very near future, while lowering costs and gaining an economy-of-scale edge that Tesla would envy. But Cruise Automation (which GM bought in 2016 for $1.5 billion), was losing money then and continues to do so. Some rivals, like Toyota, which thinks autonomous driving could be decades away, are moving with greater caution. But how could any CEO simply turn her back on a windfall in ride-hailing that McKinsey sees generating $1.3 trillion by 2030? And how could Barra discount the possibility that a too-timid GM could become the next Kodak or BlackBerry?

GM designers have come up with 18 different prototypes using the carmaker's next-generation battery pack, including sedans, SUVs, sports cars, and autonomous vehicles. As GM lays off old-line engineers, it is hiring coders, software and AI engineers, and battery experts. While it's a given that GM's EVs need to get better fast (Chevy Bolts lose $9,000 apiece), Barra at the same time has to keep money flowing even as U.S. and China vehicle sales slide.