GM's CEO said 2023 would be 'a breakout year' for EV production. But demand has fallen sharply.

Mary Barra, CEO of General Motors, speaks during an interview with David Rubenstein, the President of The Economic Club at the Ritz Carlton Hotel on December 13, 2023 in Washington, DC. Barra covered many topics pertaining to the automotive industry during her interview, including electric cars and the workforce involved in the production of vehicles. — GM's CEO Mary Barra
Anna Moneymaker / Getty

GM's CEO Mary Barra bet big on EVs and driverless cars.
But production issues and hesitant US buyers have dashed her vision.
Barra told The Wall Street Journal that she has hopes the market will turn around in 2024.

Mary Barra has transformed General Motors in the nearly 10 years she's been CEO, setting the company up as an early-mover in the electric car market and investing in futuristic solutions like self-driving cars.

After pledging to spend $35 billion on development from 2020 to 2025, this year was meant to be "a breakout year" for EV production she told GM's investors, The Wall Street Journal reported.

Instead, the company has been hit by production line issues and a tough market of consumers reluctant to embrace the software-heavy EVs.

In September, GM revealed that it was facing a major bottleneck in its factories due to issues with the automated systems that were meant to fit battery cells in their vehicles.

The Detroit factory where the Hummer is built was at times only making a dozen of the pickup trucks per day, despite the company saying it had a reservation list of around 80,000, The Journal reported.

The production line issue is expected to continue into 2024.

General Motors CEO Mary Barra speaks at the General Motors Factory ZERO electric vehicle assembly plant on November 17, 2021 in Detroit, Michigan. U.S. President Joe Biden spoke at the event, touting the benefits of the infrastructure bill he signed two days ago that allocates $1 trillion for, among other things, adding electric vehicle charging stations around the country as automakers retool away from the internal comubustion engine — GM have faced major production line issues this year that are expected to continue into 2024.
Nic Antaya / Getty

On top of factory issues, demand in the US market has stalled as EVs remain too expensive for many consumers and the tight economy has curtailed sales.

In its October third-quarter earnings call, the company announced that it would abandon targets to build 100,000 EVs in the second half of 2024 and another 400,000 by the first six months of 2024.

"As we get further into the transformation to EV, it's a bit bumpy," Barra said in the earnings call.

A partnership with Honda was also cancelled amid the tough sales conditions, Bloomberg reported.

The company has also wanted to push into the driverless car market, pumping over $8 billion into the San Francisco driverless startup Cruise. But the business has struggled and proved expensive for GM, which has an 80% stake in the startup.

Earlier this month, Cruise's new boss Mo Elshenawy said that the company "all-time low" after recalling its entire fleet of driverless cars following an accident.

Despite their struggles, Barra remains positive about GM's electric future, telling The Wall Street Journal that she still has confidence in both the electric and driverless-car parts of her strategy.

But for now, GM is going with the goal of producing 1 million EVs in North America 2025.

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