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Economy

Record high gas prices are driving demand for electric vehicles or EV

STEVE INSKEEP, HOST:

This week, General Motors says it's releasing a new electric vehicle called the Cadillac Lyriq. It's been a few years in the making, but the arrival is well-timed. Cars are selling out, EVs are especially popular, and gas prices are high. We talked over GM's transition toward electric vehicles with the company president, Mark Reuss, who grew up in the car business. His dad was GM president before him, in the early '90s.

How different is this moment from the 1990s, when your dad was GM president?

MARK REUSS: Whoa. You know, boy, that's a big conversation. But I got to say, you know, my dad was one of the champions of EV1 in the mid-'90s. And so, you know, the early mass production of an electric vehicle was unheard of at that time. It was a great, great car, but, you know, the auto industry was very different back then. Our capacity was different, but the industry itself was quite sprawling. In fact, I'm not sure any of the geopolitical issues that we have today - whether it be the situation we find ourselves in with Ukraine and Russia, or the chip shortage, or the pandemic itself for the last two-plus years - is very different.

INSKEEP: Are you telling me that changing the production models and changing the mentality of the auto industry has felt, over the years, like an even bigger challenge than the things that are in the news right now?

REUSS: I think so. And if you think about that, you know, we went through a very large global economic crisis back in '08, which really re-racked many of the businesses in the industry, including General Motors, obviously, but our capacity and demand is much more in line than it was in the '90s and '80s. We no longer have, you know, too much capacity in the industry for what the demand is. And in fact, you can see that pricing right now is at all-time highs. We've never seen this in the industry before because we just can't quite meet demand due to the pandemic, but also the chip shortages as a result of that.

INSKEEP: I'm thinking about the war in Ukraine, a country that makes auto parts. I'm thinking that that war involves sanctions against Russia, which is a source of nickel. Are you in a situation where, if you're putting out this Cadillac Lyriq, this brand new car, you have to prioritize and maybe slow down your production of other models?

REUSS: We have, as a result of some of the chip shortages, really gone deep into our production supply chains and secured things like nickel in advance of any crises, and we have a good outlook and a very good process on securing supply of raw materials from any of these countries. And in fact, some of the lithium and other rare earth pieces of cobalt are actually going to be taken from places domestically as well as internationally, so we've got a very robust supply chain that we're working on.

INSKEEP: I want to ask about the ways that you try to meet the concerns that people raise about electric vehicles when they consider buying them, one of them being - where am I going to charge this? When am I going to charge this? I gather that GM dealers are effectively supposed to become your charging station and distribute charging stations through their cities. How quickly can that happen?

REUSS: Well, it's happening right now. And in fact, we're using our dealer body. You know, we've got around 4,000 points that we sell and service GM vehicles, and we're using the dealers to help us locate where we're going to put those charging stations in, which is in the municipalities around the dealership.

INSKEEP: You think that you're going to be able to reassure people that they can take a long-distance trip in an electric vehicle and not get stuck somewhere?

REUSS: I do. And that really gets around how fast you can charge. We're driving the technology to be able to charge in that same amount of time that you fill the gas tank.

INSKEEP: I just want to point out the obvious here - the Hummer that you're selling is a high-end vehicle. The Cadillac Lyriq that you're releasing is a fairly high-end vehicle. You want EVs to be available to everyone, but are you really going to be able to do that, given the price?

REUSS: I guess I take issue with - all electric vehicles will be more expensive than internal combustion engine vehicles. You know, vehicles like the new Equinox coming in 2023 will be right around $30,000, which is slightly below the average price of a vehicle today. So our volume plays on this, and so we're going to hit the price points that we always did, and it's our job to deliver those right at the price points that everybody can get into an electric vehicle.

INSKEEP: Okay. So you're confident that within - what? - a little more than a decade, you just won't be making internal combustion engines at all?

REUSS: Well, we'll see. The adoption rate, you know, by things like the higher gas prices today is only going to be an accelerant for that, I believe. But I think most people still haven't driven an electric vehicle. And when you drive one, you realize the convenience and you realize the ability to charge at home. So we've got to get them out there, we've got to get price points that people can afford, and we've got to have charging that's fast, and we've got to have that infrastructure in place. And, you know, we're going to have it.

INSKEEP: Mark Reuss of General Motors. Thanks so much.

REUSS: Thank you, Steve. I appreciate your time. Transcript provided by NPR, Copyright NPR.