In 2017, General Motors withdrew from the European market. After nearly 20 years of trying to make the region profitable and free up cash that the company could use to develop a more profitable business elsewhere, a tactical retreat followed. This mostly involves expanding its footprint in China, eliminating mid-size passenger cars from its North American lineup, and earmarking any additional funding for the development of electric vehicles. However, the automaker’s Western customer base has been slower than expected to adopt electric vehicles, even as gasoline prices are staggeringly high, and market analysts expect the U.S. to become the latest developed country to see alternative powertrains go mainstream.
One possible solution to this dilemma is to sell these all-electric vehicles elsewhere, namely in Europe.
According to a report Bloomberg, there have been rumors inside GM that it may start exporting the Cadillac Lyriq to the EU. Talks are said to be preliminary, and unnamed sources have also suggested other EVs may follow. That includes the Hummer EV, which should start production in 2023.
of Bloomberg:
GM’s expanded product offering will expand its reach in a market where the company currently sells only a handful of luxury cars and Corvette sports cars.
A GM spokesman said no final decision had been made.
The move will give a new boost to the region after the company sold its mainstream brands Opel and Vauxhall in 2017 to what is now Stellantis after 20 years of losses.
General Motors recently revived the dormant Hummer brand, starting production of electric pickups in December.
The nameplate is controversial among environmentalists, and the Hummer H2 model gets around 10 mpg.
The automaker bought the Hummer brand from military contractor AM General in the late 1990s, at the height of the SUV boom in America.
While the new Hummer doesn’t have to worry about today’s fuel prices, environmentalists may eventually realize that a 9,000-pound car (over 4,000 kilograms if you’re European) may not be as energy efficient. That is. But that’s not the only downside GM will face when it implements the plan. New car sales in Europe have fallen for nearly a year, with the region experiencing record inflation and a sharp drop in consumer confidence following the COVID shutdown. The Ukraine war has greatly exacerbated these problems, and the impression is that this could be a bad investment time for GM.
But it might work longer. Europe currently plans to ban the sale of gasoline (or diesel) cars by 2035, while Cadillac has set a goal of converting its entire lineup to electric vehicles by 2030. In fact, strict regulatory pressure was reportedly one of the reasons GM decided to sell Opel and Vauxhall in 2017. Although we’re surprised to learn that’s the main reason, as the automaker has suffered financial losses for 20 straight years as it’s been on the market.
If you’re wondering what the real odds are for GM to take another hit in Europe, this scenario seems entirely plausible. In late 2021, former Cadillac vice president Mahmoud Samara was tasked with trying to figure out how to restart operations across the pond. Considering his subsequent promotion to president and CEO of GM Europe, one would think the resulting strategy was well-received. We also know the automaker wants to launch a mobility startup that ditches the traditional dealership model — something that’s easier to do than in North America.
[Images: General Motors]
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