General Motors is extremely proud of its #2 slot in domestic EV sales, second only to industry leader Tesla in the US market. Despite the ongoing tariff turmoil and the forthcoming loss of the federal tax credit, the automaker is still determined to blow past Tesla for the #1 crown. In the latest news, GM plans to import low cost LFP batteries from the well known Chinese firm CATL over the next two years, pending the rampup of a domestic source. Wait, don’t they know EV sales are going to crash?
EV Sales Will Not Crash, Part I
To be clear, there is plenty of damage yet to be done to the vehicle electrification movement in the US before President Trump and his anti-EV agenda leave office as scheduled on January 20, 2029 — peacefully this time, one hopes. If a sharp downturn in EV sales does happen over the coming years, Republican representatives in Congress can also take much of the credit. They kneecapped the existing $7,500 federal EV tax credit last month when they passed the new “OBBA” tax bill. Under the new schedule, the credit will end on September 30.
Still, EV sales will not screech to a sudden halt. They will continue at some level or other. Federal tax law is an important stimulus, but the US market has long been characterized by a majority-male, relatively well-heeled clientele that can afford to pass on a one-time tax credit and reap the unique benefits of zero emission mobility for years to come.
On top of reduced maintenance and fuel costs, there’s the convenience of fueling up at home or work, the security of emergency backup power with bi-directional charging technology, and the opportunity to benefit from rooftop solar panels, home energy storage, utility demand-response programs, and other related technologies.
EV Sales Will Not Crash, Part II
The charging station situation is also rapidly evolving to embrace a new EV-purchasing demographic. The vast majority of drivers prefer to recharge at home, but millions of potential buyers live in multi-household properties without charging stations. The solution has finally begun to emerge in the form of Charging-as-a-Service business models that do all the heavy lifting for property owners and residents, including planning, permits, installation, operation, and maintenance.
Another bottleneck has been gumming up the works on the grid side, in areas where a wobbly infrastructure can’t support fast charging technology. That roadblock is also evaporating with the help of drop-in charging stations. Equipped with their own energy storage feature, these chargers deliver a fast charge to EV drivers in a hurry, while the storage system recharges itself from the existing grid at a slow pace when conditions are optimal.
As for affordability, that’s where the new GM-CATL hookup comes in. CATL produces LFP (lithium-iron-phosphate) EV batteries overseas, which means they are subject to whatever new tariffs the President feels like announcing at the moment. However, GM is eager to keep its EV sales record hopping, and is willing to weather the tariff storm over the next couple of years until the company can ramp its LFP operation in the US up to speed.
New Low-Cost LFP Batteries From CATL
The new GM-CATL hookup was reported yesterday by multiple news organizations, with The Wall Street Journal reportedly getting the scoop and Reuters following up, among others.
“General Motors will import electric vehicle batteries from Chinese battery giant CATL. The arrangement is a stopgap for GM in the next couple of years as it works to manufacture its own lower-cost batteries made with lithium iron phosphate (LFP) chemistry,” Reuters reporter Nora Eckert reported.
Eckert cited a GM statement confirming the plans. “For several years, other U.S. automakers have depended on foreign suppliers for LFP battery sourcing and licensing. To stay competitive, GM will temporarily source these packs from similar suppliers to power our most affordable EV model,” the statement read.
“The Detroit automaker added that it sells 12 EVs in the United States with domestically-produced battery cells, and in 2027 will bring LFP production to the U.S.,” Eckert added.
EV Sales & The Return Of The Chevy Bolt
By “our most affordable EV model,” GM means the on-again, off-again Chevy Bolt. The popular EV first launched into production in 2017, with GM billing it as “the first long-range, mass-produced EV available to customers at a truly affordable price.”
Despite the enthusiasm, GM halted production in 2023 in favor of turning its attention to bigger, more expensive EVs. That made sense in the pro-electrification days of the Biden administration, when the Bipartisan Infrastructure Law of 2021 stimulated high end EV sales with a new $7,500 tax credit.
Still, GM is among the EV makers promising to bring more affordable electric cars to the masses, and LFP technology provides a new opportunity.
On July 29 GM teased a brief sneak peak of its plans for re-launching the Bolt. “There will be updates to the front fascia and rear tail lamps, a NACS charging adapter port, and some other cool stuff that…we’ll show you later,” GM stated. That was the sum and total of the sneak peak. This week’s LFP news certainly adds more meat to the bones (see more Chevy Bolt background here).
LFP Batteries & The Affordable EV Of The Future
GM is not the only automaker to bank on LFP technology as the key to unlocking EV sales. Conventional lithium-ion batteries are still the gold standard for long range, but LFP technology can satisfy the habits of many drivers at less expense, and CATL is among the battery makers pursuing that market.
GM’s July 29 teaser for the new Bolt EV followed an earlier announcement about its LFP plans, in which the company described the transition of its existing battery factory in Spring Hill, Tennessee, to produce LFP batteries before the end of 2027.
“At GM, we’re innovating battery technology to deliver the best mix of range, performance, and affordability to our EV customers,” explained GM’s VP of batteries, propulsion, and sustainability Kurt Kelty.
“This upgrade at Spring Hill will enable us to scale production of lower-cost LFP cell technologies in the U.S., complementing our high-nickel and future lithium manganese rich solutions and further diversifying our growing EV portfolio,” Kelty added.
Clearly GM is in a real hurry to introduce those new LFP batteries before the upgrade is completed. With Tesla busily shredding its own EV sales record, GM and other automakers have a golden opportunity to fill the gap, tariffs and tax laws notwithstanding.
Thoughts? Is GM living in a fantasy world or will LFP technology carry its EV sales momentum through stormy seas?
Photo (cropped): Tariffs, schmeriffs: GM plans to boost its EV sales record with low cost LFP batteries from CATL and a refresh of its popular Chevy Bolt (courtesy of GM).
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