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How General Motors is pushing for an all-electric future

Gerald Johnson, GM Executive VP of Global Manufacturing, joined Yahoo Finance Live to discuss the company's push for an all-electric future.

Video transcript

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SEANA SMITH: Let's turn now to our Earth Week coverage. It continues here at Yahoo Finance. And for that, let's get over to Akiko Fujita. Akiko?

Thanks so much for that, Seana. We're focusing in on the transportation sector now because [INAUDIBLE] for just over 30% of US emissions. One of the world's largest car makers, though, now making a bold commitment here. General Motors recently announced a commitment to phase out all cars using internal combustion engines by 2035. For much more on this plan, let's bring in Gerald Johnson. He's executive vice president of global manufacturing. Gerald, it's great to talk to you today.

You've certainly hit the ground running here with a number of EVs already unveiled. We have the Cadillac, the Hummer EV, the upgraded Chevy Bolt. How do you get from now to 2035 from a manufacturing standpoint? What does this overhaul entail?

GERALD JOHNSON: Yeah, thanks Akiko. First of all, we continue to do what we've been doing here. We've been announcing our investment strategy and $27 billion of investment to help make the transformation. That investment goes, of course, towards product. But it also go towards turning over our manufacturing operations to build an EV portfolio. Prime examples, I think, are our Factory ZERO operation that we are in the midst of restarting back up to run the EV Hummer, and also the cruise origin product which is an EV AV product that we're going to bring through there.

And we just announced also Silverado truck. So we're bringing new products up. And we're making sure all those products cover the gamut of market segments as we continue towards the future.

AKIKO FUJITA: So let's talk about the manufacturing overhaul there. You mentioned Factory ZERO, 4 and 1/2 million square feet here where you're essentially rebuilding the factory floor to be able to configure for electric vehicles. What does that entail, number one from the employee standpoint, employee count, but also from just the machines, the assembly line? I mean, walk us through the specifics.

GERALD JOHNSON: Sure. So you're exactly right. 4 and 1/2 million square feet starts out by clearing the place completely out. And that's what we did. And I literally mean a football field of open space of allowing us now to redo all the technology going into that plant for the convenience necessary to do an EV product for the marriage stations, for an all new paint operation as well, and battery self assembly work.

To do that and also add in all the technology that's going to allow this to also be one of the most automated and competitive plants technologically is what we're doing in Factory ZERO, and what we will repeat in our Spring Hill, Tennessee factory, where the Lyriq, the new Cadillac that we just announced and showed today, will be built there, and where we've already done a lot of this work and had a lot of learnings as we've done the Bolt product in our Orion facility here just outside of Detroit.

So these are the pieces. And all of this means that we are able to bring our employees with us. Factory ZERO will have more employees when we're fully up and running again than it had before. Not to mention, what we're doing with adding battery facilities. We're doing cell manufacturing as well on location in Lordstown, and we announced just recently another location in Tennessee.

We have to own the vertical integration of the product so that we can have confidence that we can live our commitment of having no tailpipe emissions by 2035 and being carbon neutral by 2040.

AKIKO FUJITA: So let's talk about that vertical, then. Because at the end of the day, the big question here is, how do you make EVs affordable? You look at the market right now, roughly 2% of the market's EV, a big chunk of that is Tesla. Certainly not a lot of drivers out there that can afford Teslas if you're talking about being able to do this on a larger scale. How do you get the buy in from the customer?

GERALD JOHNSON: Right. So the buy in really comes through experience. I think the customer overall is aware now. I think the customer understands the importance of climate change. I think there's great interest [AUDIO OUT] the experience, though. Not enough people have experienced an EV product yet.

We're given that opportunity. You mentioned the cost. So our Bolt EUV is a $32,000 vehicle, which is below the average transaction price of vehicles being sold today that are internal combustion engine. The key, of course though, is continuing to work the battery technology. No pun intended, the powerhouse of this vehicle is also where we're applying the most innovation to increase energy density. So we think we've taken range anxiety off the table. Our Altium platform can produce over 450 miles of electric performance.

So that was one for the customer. The second one, of course, is cost. We now see our way down to reduce the cost of a battery by 60%. And so we're on that cost curve. And that will allow us to continue to price and provide vehicles across the entire segment from smaller SUVs, to midsize, to large pickup trucks, to EV Hummers and Cadillacs. So that's the third piece. The last piece is fast charging. And that's where we continue to innovate.

We believe when we handle those things, our market research tells us as we improve those elements that customers are interested and willing to cross over to an EV product.

AKIKO FUJITA: I wonder if you can speak to the competitive landscape here. There's a number of companies that have entered the EV space. Certainly a very crowded one. If you look at even companies like Rivian or Lordstown Motors, how many of these companies you think actually survive? Are we likely to see significant consolidation?

GERALD JOHNSON: I would hazard to say yes, that there's not enough space for all those who are interested. But I would not want to predict who's going to make it and who's not other than to say General Motors is going to be there and plans to be a leader in that space. But I think the interesting thing is is that everyone senses the transformation of our industry. So if you go back 100 years when we went from horse and buggy to internal combustion engines, it's that kind of transformation.

And then back in that time, we had literally tens of manufacturers trying to mark their claim in that internal combustion industry, automobile industry. And we're seeing that again in EV. We believe that we bring particular capability, our supply network, our dealer network, our 100 years of manufacturing capability, and a great deal of innovation from my engineering organization.

AKIKO FUJITA: Gerald Johnson, executive vice president of global manufacturing for GM. Appreciate the time today. Thanks so much for joining us.