General Motors' (GM.US) electric vehicle market share doubled, posing a challenge to Tesla, Inc. (TSLA.US), with leasing incentives and a full lineup of bets on the tipping point.

General Motors Company (GM.US) has invested billions of dollars in the past few decades to develop the electric vehicle market, launching several innovative electric and hybrid vehicles. However, they have not been able to achieve mass sales in the mainstream market and have gradually been phased out. However, this time the situation may be different. With a doubling market share and new affordable models, General Motors' electric vehicles are challenging Tesla, Inc. (TSLA.US) Despite a slowdown in market demand last year, this leading American car sales company has successfully increased the sales of electric vehicles and regained market share from competitors such as Tesla, Inc., as more consumers are choosing electric vehicles over traditional fuel-powered models. Four industry analysts have said that this progress is due to General Motors' expanding line of electric vehicles (soon to include over a dozen models), which indicates that General Motors may have successfully convinced more mainstream consumers to purchase electric vehicles. Data shows that in the fourth quarter, General Motors held a 12% market share in the U.S. electric vehicle market, doubling from the previous year and second only to Tesla, Inc.'s 44.4%. General Motors' Cadillac Lyriq EV had a two-fold increase in sales last year, reaching 28,402 units, surpassing the sales of their gasoline SUVs XT4, XT5, and XT6. In addition, the more affordable Chevrolet Equinox and Blazer EV accounted for 22% and 40% of the total deliveries in the fourth quarter for their respective models. Despite still facing significant losses and competition from rivals like Ford (F.US), this growth highlights General Motors' firm commitment to electric vehicles, while Toyota (TM.US) focuses on hybrid cars. Analysts believe that General Motors' surge in electric vehicle sales is due to the increasing number of competitive models, offering customers a wider range of electric vehicle choices than their competitors, from entry-level to high-end models. For example, although Tesla, Inc. has five models, only two have significant sales. General Motors' Global Markets chief Rory Harvey stated in an interview, "We have the broadest product line, and we definitely have momentum. We all know that the auto industry is a momentum game." Boosted by affordable leasing options vs subsidy cuts + tariff threats Industry analysts and two General Motors dealers have pointed out that aggressive pricing through low payment leasing has also driven sales growth to some extent, making General Motors' electric vehicles more competitively priced than similar fuel vehicles. This inexpensive electric vehicle leasing is common in the industry and is mainly facilitated by a $7,500 subsidy. However, U.S. President Donald Trump is expected to end this subsidy and other policies supporting electric vehicles. Trump has also threatened a 25% tariff on Canada and Mexico, which would impact General Motors as they produce hundreds of thousands of vehicles in Mexico, including the Blazer and Equinox electric vehicles. Industry experts state that political and market headwinds in the electric vehicle market will make 2025 a crucial year for General Motors to maintain its momentum and reach a tipping point in its extensive and costly electrification efforts. A key moment will come later this year when General Motors launches the next generation Bolt, expected to be priced around $30,000, making it their most affordable electric vehicle. Paul Waatti, industry analysis director at research firm AutoPacific, said, "This year is critical for General Motors." General Motors has always been a pioneer in the innovative electric vehicle field, but they have faced setbacks since the introduction of the EV1 in 1997 (a futuristic pill-shaped two-door car). General Motors also introduced the first mass-produced plug-in hybrid vehicle - the 2011 Volt, followed by the all-electric 2017 Bolt, which was the only relatively affordable electric car at the time. However, all of these models were discontinued before achieving mass production. Despite some recent progress, General Motors faces significant challenges in fulfilling CEO Mary Barra's pledge to have an all-electric fleet by 2035. Industry experts state that electric vehicles currently make up only about 6% of General Motors' overall sales in the fourth quarter, and the company still relies on large trucks and SUVs, which are among the most difficult to electrify. General Motors is betting on leasing incentives and a full electric vehicle matrix General Motors now offers 10 models, not just one Volt.Whether it's the affordable Bolt or the six-figure SUV Equinox. Cadillac has just launched the compact electric SUV Optiq, followed by the three-row Vistiq and the lower-priced electric truck.General Motors Company says it is also getting closer to making a profit on electric vehicles. Chief Financial Officer Paul Jacobson said General Motors Company plans to reduce losses on electric vehicles by around 2 billion dollars by 2025, but did not disclose the total annual loss. However, this estimate depends on the continued growth of electric vehicle sales and may be difficult to achieve if Trump cancels subsidies for the purchase and leasing of electric vehicles. Ivan Drury, Insights Director at automotive research company Edmunds, said that unless automakers lower prices, losing the $7,500 incentive could result in a significant drop in electric vehicle sales. "We know what happens if the subsidies and discounts aren't there," he said of electric vehicle subsidies and discounts, "You can't sell them." General Motors Company said that if subsidies are terminated, the company has not yet decided whether to lower prices and will wait to evaluate consumer and competitor reactions. However, General Motors Company spokesperson Jim Cain said that the company's commitment to electric vehicles is "very long-term." The $7,500 electric vehicle leasing incentive is key to low-cost transactions that can persuade skeptical electric vehicle shoppers. Edmunds data shows that over 70% of electric vehicles were leased at dealerships last year, including 55% of General Motors electric vehicles. "Lease incentives are the real key," said Jeff Rayl, who owns Buick and GMC dealerships in Detroit. He said that for some high-end models, a car worth $100,000 only costs $700 per month. Electric vehicles outperform hybrid vehicles While competitors like Ford and Toyota focus more on hybrid vehicles, General Motors Company continues to heavily invest in electric vehicles. This decision has paid off for them, as consumers are turning to hybrid vehicles to avoid the costs and charging hassle of electric vehicles. Toyota has long dominated the hybrid vehicle market, but electric vehicle sales have been low. The company believes that electric vehicle technology is not yet advanced enough and not affordable for most consumers. Last year, Toyota delivered over 2.3 million vehicles in the US, with hybrids accounting for over 40%. Ford's hybrid vehicle sales grew by 40% to around 187,000 vehicles, almost double its electric vehicle sales of around 98,000 vehicles. In contrast, General Motors Company sold 114,432 electric vehicles. As a short-term strategy to meet emissions regulations, the automaker plans to introduce plug-in hybrid vehicles in 2027, but has no plans to produce lower-cost and non-charging traditional hybrid vehicles. Harvey of General Motors Company said, "In the end, we believe that electric vehicles will be the way forward, complemented by some hybrid vehicles." At an industry conference in New York in February, CEO Bolla said that hybrid vehicles are just a temporary solution and that developing a vehicle with both gasoline and electric propulsion systems is an inefficient use of capital. Morningstar Research automotive stock strategist David Whiston said that General Motors Company is better off sticking to developing electric vehicles, in part because now it needs to invest heavily in hybrid systems to take sales away from existing competitors. He said, "General Motors Company would find it difficult to compete head-on with Toyota in the hybrid vehicle field." General Motors Company officials argued that they did not miss out on sales opportunities in the hybrid vehicle craze because they offer other fuel-saving technologies such as diesel engines and small turbocharged gasoline engines. Truck Dilemma However, the biggest obstacle facing General Motors Company's goal of full electrification may be its lucrative business in full-size trucks and SUVs. General Motors Company's ambitious plans for rapidly transitioning to electric trucks so far conflict with the challenge of making trucks affordable and powerful enough to sell in large quantities. In 2022, General Motors Company plans to produce 600,000 electric trucks at its Detroit Zero factory and another factory planned to reopen in nearby Orion Township. The reopening of the Orion Township factory has been repeatedly delayed and is currently planned for mid-2026. General Motors Company began delivering the Silverado EV RST First Edition, priced at $94,500, in mid-2024. However, last year, General Motors Company only sold 9,000 electric Silverado and Sierra trucks, with total sales of around 900,000 trucks. Competitors' electric trucks launched before last year - Ford's F-150 Lightning and Tesla, Inc.'s Cybertruck - sold around 33,000 and 39,000 units in 2024, but the overall electric truck market is still very small. This year, General Motors Company hopes to increase sales through.Introduce two new car models to increase sales, with starting prices of $57,000 and $73,000 respectively.One factor that hinders the sales of electric pickup trucks is that carrying or towing heavy loads greatly reduces their driving range and requires constant recharging. Sam Abuelsamid, Vice President of Telemetry Insights, stated that in order to increase the range, automotive manufacturers have been adding larger batteries, but this also makes the prices of electric trucks extremely expensive. The profitable truck and SUV business of General Motors Company has played a key role in providing funding for General Motors Company's loss-making electric vehicle and autonomous vehicle businesses. However, Abuelsamid stated that it is difficult for General Motors Company to squeeze the same profits from the electric truck business. He said, "In the foreseeable future, they may not be able to obtain the same profits - unless we make significant breakthroughs in battery technology."