Assignment 5c- Innovation and Organizational Strategy Discussion

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Kenyatta University *

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Economics

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Nov 24, 2024

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Innovation has been the order of the day in the Automobile Industry in the last couple of years. With the demand for environmentally conscious products, and a call to abandon the gas-powered vehicles amid environmental concerns, automakers across the globe have accelerated investments in EVs or hybrid models. In the US, many automakers have set the last date they will produce gas-powered vehicles or rather the date they stop producing gas-powered engines. General Motors is one of the largest auto manufacturing companies in the US, headquartered in Detroit, Michigan. The company was founded in 1908 and since then it has grown to become a multinational corporation with a revenue of $156.7 billion as of 2022 (U.S. Securities and Exchange Commission, 2023). The company operates a number of key brands across the globe, including Buick, Cadillac, GMC, and Chevrolet. As far as Electric vehicle production is concerned, GM has put up a strategy to help cruise through and be a leader (No. Seller) of electric vehicles across the globe. During a Barclays Global Automotive Conference held in 2020, GM CEO, Mary Barra noted that GM has a plan to ensure that 40% of the vehicles the company will offer in the US will be battery electric vehicles by the end of the year 2025 (LaReau, 2020). In order to achieve this dream, she noted that GM plans to invest $27 billion through 2025, up from the $20 billion the company had planned before the onset of the COVID-19 pandemic. She also added that GM will hire a record 3,000 engineers and technology specialists to help realize the EV strategy (LaReau, 2020). Barra also noted that GM is also accelerating its plans to build “two new battery cell manufacturing plants in the US by 2025” to support the already existing factories in Ohio and Tennessee (Hawkins, 2021). In order to operate profitably after transitioning to the EV business model, GM has laid down plans to ensure that the profitability margin is similar to that of internal combustion engines. To facilitate the mass adoption of EVs, GM has created a new organization known as EV Growth Operations that will be solely focused on the EV business and driving customer adoption (LaReau, 2020). Reference U.S. Securities and Exchange Commission. (SEC. gov.) (2023, January 31). General Motors Company 2022 form 10-K . SEC.gov. https://www.sec.gov/ix? doc=/Archives/edgar/data/1467858/000146785823000029/gm-20221231.htm LaReau, J. (2020, November 19). GM to bring 30 new electric vehicles to market in next 5 years . Free Press. https://www.freep.com/story/money/cars/general-motors/2020/11/19/gm-electric- vehicles-investment/6342191002/ Hawkins, A. J. (2021, June 16). General Motors’ electric vehicle plan just got even more expensive . The Verge. https://www.theverge.com/2021/6/16/22536601/gm-ev-investment- increase-amount-electric-autonomous-vehicles

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