General Motors’ China operations will have access to its entire portfolio of electrified tech solutions to begin turning out domestic and “global” green cars over the next five years.
China is the world’s largest car market and GM’s largest as well, accounting for over a third of its business. The company said last month that through 2020 it will announce more than 10 plug-in electrified “new energy vehicles” (NEVs) plus hybrids, out of over 60 new and refreshed models in an overarching growth plan.
“During the next five years, GM and its joint ventures will roll out more than 10 new energy vehicles under the Chevrolet, Buick, Cadillac and Baojun brands,” the automaker said in a statement. “They will include the Shanghai-built Cadillac CT6 Plug-in Hybrid Electric Vehicle, which will go on sale later this year.”
The company’s joint ventures are SAIC-GM which is responsible for Buick, Chevy, and Cadillac, and SAIC-GM-Wuling, which produces Wuling and Baojun brand vehicles.
The upscale CT6 is the first of the promised NEVs, and due also for export to the U.S. It is intended to compete with German sedans, sell in limited volume, and uses an evolution of the Volt’s drive unit with increased power.
Another officially issued statement by GM specifically teases plug-in type vehicles American enthusiasts have asked GM for years to build.
“GM’s leadership in electrification technologies, now and in the future, are coming to Buick in China,” said Larry Nitz, GM executive director of Global Propulsion Systems this week. “In fact, over the next five years, we will roll out more than 10 new energy vehicles in China, including several models for Buick. That includes full hybrids, plug-in hybrids and extended-range electric vehicles.”
Despite Nitz’s statement, China’s government does not classify non-plug-in hybrids as NEVs. The first of these however, the Buick LaCrosse Hybrid, was unveiled this week. This Chinese market car is the second non-plug-in hybrid derivative from the Volt, and has a powertrain nearly identical to that which is in the U.S. market Malibu Hybrid.
Potential To Export Globally
SAIC-GM has said the LaCrosse Hybrid is only for Chinese sale, but industry watchers hold out the possibility that this model could become another vehicle imported to North America.
GM has not said, but unlike the Malibu hybrid and non-hybrid variants, the LaCrosse Hybrid’s powertrain is much less of a match for the 300-horsepower conventional LaCrosse capable of 0-60 in the low six-second range. Whether this would fit the line without increased power, and decreased mpg, is an open question.
To date, in addition to the CT6 Plug in Hybrid, GM has announced the Buick Envision, a conventionally powered crossover, as also being exported from China.
Speaking to Bloomberg this year regarding the CT6 PHEV, Eric Noble, president of California-based consulting firm Carlab offered his view that the Chinese-built car was one of more to come.
“Longer term, we should see more of this because GM’s Chinese operations have every capability required to provide cars for North America,” said Noble. “They would import here instead of from Europe because Chinese consumer tastes align more closely to American tastes than Europe’s ever did.”
Notable is the two vehicles GM is shipping abroad from China are upscale, expected to be world class. Its LaCrosse unveiling, while for China, was called a “global” unveiling, and the company has said more “global” unveilings are in the making.
But when asked whether China is being positioned as a new manufacturing base for more electrified vehicles to come to the U.S. and other markets, GM’s Shanghai product communications rep, Chad Lyons gave little indication that might be in the plans.
“In many cases, we believe it is a sound business practice to source suppliers and build vehicles in the markets where we sell, as opposed to shipping parts and vehicles to global markets,” said Lyons today. “In China, we expect the Plug-In Hybrid to be a very significant portion of the car’s consumer appeal. Given the vast majority of sales, close to 90 percent will take place in China, the Plug-In Hybrid CT6 will only be assembled in China, with a small quantity exported.”
Further, even if the potential is there, Michigan-based analyst Alan Baum expressed doubt that GM intends to build and export electrified vehicles any time soon to the U.S.
For one thing, the market in the U.S. may not be there. The company he said, is better at engineering than it is at sales and marketing, citing how the Volt especially has been sold the past five years, and what GM’s statements on it are to this day.
Citing also the entire slowed U.S. market – not withstanding around 400,000 reservations for the Tesla Model 3 – Baum does not see Chinese GM electrified exports to the U.S. happening in significant volume at this time. What might happen in the near term into next decade is another open question.
The prospect of 10 or more NEVs is part of greenification efforts in GM’s broader plan through 2020 projecting more than 60 new and revised models in China.
GM was an early pioneer in China 19 years ago, and while that market is slowing, GM projects growth and says it wishes to be on the cusp.
Last July, the automaker announced investment of $5 billion over the coming years in a family of vehicles for global growth markets.
“Working with its Chinese partner SAIC, GM will replace several current vehicles for growth markets based on multiple architectures with an even larger family of vehicles based on one core architecture,” said the company.
While last year China accounted for over a third of GM’s global deliveries, it expects the Chinese vehicle market to increase by 5 million units or more by 2020, about 3-5 percent growth per year.
For 2016 and each year through 2020, GM projects 40 percent of its global sales to come from new and refreshed models – up from 25 percent in 2015.
“GM is very well positioned to participate in this growth,” said GM China President Matt Tsien. “We will continue to focus on the segments where the demand is strong and growing. This has been a key to our success from day one.”
The overall product mix will be 40 percent SUV, MPV and luxury vehicles, which also are growth segments. GM also announced a host of mobility services.
While GM has said it’s committed in China, in question is the timing of remaining NEVs to be announced through 2020, and even regular hybrids.
It is thus anyone’s guess what might be the specific “full hybrids, plug-in hybrids and extended-range electric vehicles” (plural) Nitz said are coming in the next five years.
By way of reminder, General Motors is a “global” company, said Kevin Kelly, senior Manager, Global Advanced Technology Communications.
Its engineering strategy – which was called “genius” by Baum for the efficiencies it affords GM – has been to make use of various hardware and software across vehicle lines.
“We try to leverage our existing systems and components as much as possible to improve customer affordability and reduce our internal costs,” said Kelly noting the Malibu Hybrid and LaCrosse Hybrid using a drive unit (electric transaxle) developed for the Volt.
“There are less than a dozen part changes between the two systems, yet they provide two distinct customer propositions,” said Kelly. “We are also sharing battery cells between the Volt, Spark EV and CT6 PHEV. We also share software and control systems across a variety of our electrified technologies.”
And to be sure, GM is posturing itself for more, said Lyons
“Last year passenger vehicle sales here totaled a little over 20 million. Meanwhile, there were 190,000 NEV passenger vehicle sales,” Lyons said, “while that’s a big number, it amounts to about one percent of non-NEV passenger vehicle sales. There has been significant growth here in the NEV market – much of it bolstered by fiscal incentives.”
Lyons said GM is positioned to take advantage of all relevant intellectual property to create more world-class vehicles and maximize its chances for success.
“Our operations here in China have access to the full portfolio of GM’s electrification solutions as the market matures and supporting infrastructure grows,” said Lyons. “This is why we’ve committed to 10 new NEV’s within the next five years.”
But the broad plan includes other technologies for conventional engines to maximize efficiency, said Lyons.
“In the interim, we are adopting stop/start, small displacement turbocharged engines and HEV more and more,” said Lyions. “All of the Cadillac, Buick and Chevrolet vehicles we’ve launched this year in China offer turbo and stop/start. Two are HEVs (Malibu, CT6, XT5 and LaCrosse).”
Speaking to Bloomberg in January, GM President Dan Ammann summed things up on where it sees China.
“That will be the largest market for electrified vehicles,” Ammann said. “The next generation of fuel-economy rules in China will be quite stringent at the end of this decade and into the next.”
North American Implications
While GM yet may build new plug-in hybrids and extended-range electric vehicles in the U.S., it has not yet said as definitively what it has in store.
“We have not made any specific claims regarding future rollout targets for electrified vehicles in the U.S.,” said Kelly.
Kelly added he was not at liberty to discuss specifics of GM’s U.S. electrification strategy, or its plans for leveraging specific technologies for specific applications in the future.
General Motors does have a closely guarded plan in the U.S. however, said Pam Fletcher, GM executive chief engineer for electrified vehicles, in an interview at the Volt unveiling in January 2015.
Yesterday Kelly added he could not confirm where potential systems and components will be manufactured, though eyes are on China and elsewhere, not to mention the U.S.
The company has made significant investments in North America also, and Kelly simply said GM has its options open.
“GM is a global company and we’re focused on delivering our customers around the world with electrification solutions that will provide them tangible benefits in terms of fuel economy gains,” he said. “There’s not one solution that will work in every market for every customer so we’ll continue to provide multiple technologies.”