The struggling battery factory behind GM’s electric vehicle woes

General Motors Co. is rushing to fix problems in its electric car sector and deliver on the promises Chief Executive Officer Mary Barra made five years ago. There is still a long way to go.

Fresh from exiting major markets like Europe and India, Barra told GM employees in the spring of 2019 that the company was shifting its strategy to bet heavily on electric cars and self-driving cars. She was not satisfied that the automaker would survive the new technology-driven era of transportation; it had to be a leader.

That transition has been fraught with delays, including automation problems and software problems that have caused the automaker to miss its electric vehicle delivery targets over the past two years. Getting the EV plants humming is Barra’s last chance to take GM from a 20th-century metal bender to a trucking company of the future.

GM executives think they may finally be emerging from their “production hell” phase, similar to the robotics problems that slowed Tesla’s Model 3 seven years ago. GM aims to build 200,000 to 300,000 all-electric vehicles this year with its vaunted Ultium battery packs, about 20 times more than last year but still far short of its previous ambitions.

“We’ve had some challenges in scaling it,” Chief Financial Officer Paul Jacobson said of the Ultium problems in a recent speech at an industry conference in Washington. “I think most of those are behind us.”

Investors say it’s time for GM to prove it. The company sold fewer than 14,000 Ultium EVs last year, about the same as struggling startup Rivian Automotive Inc. in the fourth quarter. Since then, GM says it has doubled battery production at its Factory Zero plant in Detroit, but the company must expand much faster if it wants to meet its goals.

Factory Zero is the automotive industry’s first attempt to scale up a fully automated assembly line with bagged battery cells. President Joe Biden praised Barra’s vision and the promise of U.S.-built electric cars during a tour of the factory in November 2021. He even took a prototype electric Hummer for a test drive in the parking lot.

GM bypassed its own best practices to quickly put the battery packs into production. When the company prepares to build an entirely new model, it typically sets up assembly line equipment in a nearby supplier’s warehouse for testing. Once the bugs are resolved, the equipment is picked up and moved to the assembly plant for production.

GM skipped that step with Ultium, opting to immediately install new, fully automated battery assembly lines instead of testing them elsewhere first, said Mike Anderson, vice president of global electrification and battery systems.

In a gated area at Factory Zero, robots stack the bags containing six batteries at a time, pressing them down like a panini, then placing four of the sandwich packs into a box with a cooling plate on the bottom. The cells must be pressed and packed precisely so that the weld tabs connecting the modules fit through the slots in the module box. If they are not exactly aligned, the tabs will bend and the cell will not be connected to others. The battery will not pass quality checks.

That’s why every time a cell’s tab misses its slot in the box, engineers have to go inside the fence, find the problem and come up with a solution. That’s a time-consuming and expensive process, Anderson said.

The Detroit Fire Department says it has been called to Factory Zero nine times since August. The most recent was on December 19, when a pile of EV batteries started burning after a forklift punctured the battery packs. In other incidents, firefighters were called to investigate gas leaks in the batteries as a safety measure, a GM spokesman said.

“That’s more fires than anyone would want to see,” Anderson said. “It’s part of the growing pains.”

GM has brought in more battery experts, consultants and production managers to help solve the assembly problems. In February, the company hired former Tesla battery executive Kurt Kelty to lead GM’s battery business. JP Clausen, who led the rapid scale-up of EV drive systems at Tesla’s Nevada factory, was named GM’s new head of manufacturing last week.

Anderson said he believes the company has “turned the corner” at Factory Zero and will continue to ramp up production on its way to meeting GM’s latest production targets. The company will apply what it learned there to a new battery factory in Tennessee, set to open later this year, and other future locations.

Software bugs have also slowed GM’s EV ambitions. The Chevy Blazer EV was idled for nearly three months due to problems with GM’s internal infotainment software that is intended to replace Apple CarPlay and Google Android Auto. GM wants all vehicle software to be created in-house to better integrate it with the car’s hardware. After testing the vehicles for thousands more miles, the company said on March 8 that it had fixed the software and would lower prices for the Blazer EV once sales resumed.

“They should eventually be able to solve the battery production problems, but GM has struggled to build the right organization to develop software,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “Right now you can’t take GM at their word with Ultium EVs.”

GM isn’t the only automaker struggling to accelerate production of electric vehicles. Volkswagen AG also had buggy software in its cars. Wheels fell off Toyota Motor Corp.’s bZ4X. Ford Motor Co. Last month it halted production of its F-150 Lightning electric pickup due to quality issues.

The setbacks come at a difficult time for the sector, with electric car sales growth slowing globally due to high price tags and concerns over charging requirements. Production delays increase reputational risk for companies, especially among car buyers considering purchasing an electric car for the first time.

GM is hedging its bets on EVs with a simultaneous reintroduction of plug-in hybrids in North America, a business it abandoned five years ago when it discontinued the Chevy Volt.

“This is the Wild West,” said Sam Fiorani, vice president of Global Vehicle Forecasting at AutoForecast Solutions. “Everyone is having a hard time.”

GM has a lot to do with EVs. Barra has downsized GM’s global operations (ceding ground to Toyota and Volkswagen) to invest in electric cars and self-driving cars. She had an ambitious plan to double sales to $280 billion by the end of the decade by transforming GM into a technology company.

Cruise’s Robotaxi business is in shambles after a pedestrian accident and alleged cover-up in California forced the company to ground its entire fleet.

Federal government grants are also at stake. The Inflation Reduction Act gives money to automakers to build electric vehicles that meet certain production requirements. GM says it will get $3,500 to $5,500 in tax credits for every EV it makes, under the Biden administration’s policy. That amounts to a whopping $1.65 billion if 300,000 electric vehicles are produced. Payments could skyrocket in the coming years as the automaker aims to expand production capacity to 1 million electric vehicles by 2026.

But GM fell well short of its goal of producing 150,000 electric vehicles last year — half of which would be powered by Ultium — and until recently was aiming for a cumulative total of 400,000 electric vehicles by the middle of this year. Last year, the majority of its EV sales came from the now-discontinued Chevy Bolt. AutoForecast Solutions expects the company to sell just 112,000 battery-powered vehicles in 2024.

“Buyers just aren’t lining up for these vehicles,” Fiorani said. “If GM could make as many as they want, they might be able to compete with themselves on price.”

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