Drivers still key as GM heads to driverless future

Nora Naughton
The Detroit News

Despite General Motors Co.’s recent promises of an electrified and self-driving future, CEO Mary Barra said the automaker’s core business model — selling cars to drivers — won’t change anytime soon.

As the company goes all-in on mobility with a driverless taxi service in a yet-to-be-named city in 2019, Barra said the individual car buyer will be the bread-and-butter of the business for quite a while.

“The owner-driver model will be there for a very long time,” Barra said Monday at an Automotive Press Association event in Detroit. “So far we see (mobility) as additive, but we see it as having potential to grow and be quite substantial.”

The potential for ride-sharing services specifically comes when the cost of autonomous vehicles comes down, Barra said. GM has said it sees a path to bringing the cost-per-mile for a ride-sharing service down to $1 per mile — a key part of achieving profitability.

GM is wrapping up 2017 with a strong run on Wall Street. GM shares have been trading above $40 since September. Much of this success is driven by Barra’s boldness on the future, promising this year to put 20 new electric cars on the road by 2023, a driverless fleet in cities by 2019 and a million EV sales per year worldwide by 2026.

GM is marrying its electrified future with its self-driving efforts, using a fleet of all-electric Chevrolet Bolts as autonomous test mules in California, Arizona and southeast Michigan. The Bolt rolled out nationwide in August, and is the first affordable all-electric vehicle to hit the mass market. Barra has said the Bolt is leading the company into the “sweet spot of where the retail market is and where it is heading.”

As big pickups, SUVs and crossovers remain the profit pillars for GM and other automakers, the company is building on the big-battery Bolt platform to introduce two electric crossovers by 2020.

GM found success this year after acquiring Cruise Automation last year for $581 million; the San Francisco-based technology has become GM’s self-driving arm. The automaker also invested $500-million in Lyft early last year for a 9 percent stake in the ride-hailing company, but hasn’t shown much from that partnership yet.

The company already has Maven, a car-sharing service akin to Zipcar, but doesn’t yet offer a ride-hailing service. That could change in 2019, when GM has promised to launch a driverless taxi service in a yet-to-be-named city.

As GM places its bets on the ride-hailing industry to drive profitability from autonomous and electrified vehicles, Ford Motor Co. is focusing more on delivery-based services. The Dearborn automaker said earlier this year it is working with Domino’s to test pizza deliveries without a driver. Ford is also betting on hybrids over all-electric vehicles, which it says would allow the cars to drive more hours without charging.