It’s a heady time to be a car executive. Lawmakers worldwide are pushing the auto industry to electrify, and fast. US companies are under pressure to do that without giving a boost to rival nations, primarily China. Reengineering decades of internal combustion-centric technology, business models, and supply chains should be easy, right?
Meanwhile, another revolutionary technology is also approaching: self-driving vehicles. Automakers and tech companies have poured hundreds of billions into the quest for robot cars. That spending has yet to bear commercial fruit, but it is expected to reshape everything from the business of cars to city streets and the labor market.
Mark Reuss, the president of General Motors, has worked at the Detroit automaker for decades and feels the ground shifting beneath his feet. The company is ramping up production of new electric models like the Cadillac Lyriq and Chevrolet Silverado EV, manufacturing its own battery packs in a joint venture with LG, and trying to push forward self-driving subsidiary Cruise, whose operations in San Francisco have been disrupted by a serious crash and incidents of cars freezing in the road. In an interview that has been edited for length and clarity, Reuss tells Startup he’s optimistic about the reinvention of the automobile and the carmaker’s future.
Startup: I wanted to begin by asking you about the Inflation Reduction Act, which ties new tax credits for electric vehicles to tough requirements to make battery components in the US. How has that changed your thinking about the supply chain?
Mark Reuss: That started, unfortunately, with the pandemic, and looking at our supply chains on semiconductors. The whole industry goes to Taiwan, or that area of the world, to get them. And that’s not healthy. We really went at the EV supply lines so that we weren’t leveraging things around the world, but rather doing it in our country. It also led to a lot of decisions on vertically integrating our battery platforms and cell chemistries. That was really good. We’re using 70 percent less cobalt in the chemistries we’re launching with now, relative to the Chevrolet Bolt.
How bad is the chip shortage now? I’m hearing from people who are flipping their new EVs for more than they paid because vehicles are in short supply. When do you expect things to return to normal?
I don’t know what the new normal is going to be exactly. We’re in pretty good shape through the end of the year. We had about 95,000 vehicles on the ground waiting for supply that we’re now clearing. We’re addressing pricing the best we can. I see everything on the internet, too, you know, and it makes me sad.
If we look at the data, across our dealer network and all our vehicles, we’re a little bit over our suggested retail price. The really good dealers aren’t raising prices because it destroys their brand, it destroys our brand. We’re also deploying something called our digital retail platform, where customers will be able to buy a vehicle any way they want, whether it’s online, in a dealership, or in the manufacturing pipeline.