GM Needs You To Buy Gas-Guzzling Trucks So It Can Build EVs

Investing in new technology can be a costly affair - just ask General Motors. The country's largest carmaker is sinking copious amounts of cash into future electric vehicles, such as the eagerly anticipated Chevrolet Silverado EV and the ultra-luxurious Cadillac Celestiq. The automotive multinational is funding its EV ambitions from an unlikely source - gas-guzzling trucks and SUVs.

As Reuters reports, GM is relying on strong SUV and pickup truck sales to finance its electric vehicle investments, with CEO Mary Barra noting the company is selling "every truck we can build." It may sound counterintuitive, but products such as the ICE-powered Silverado 1500 and Cadillac Escalade remain massively popular with consumers, despite increasing gas prices.

The company's chief executive has said we can expect even pricier variants of its trucks and SUVs to hit the market, such as the near $150,000 Cadillac Escalade-V. The popularity of these large combustion-engined vehicles will allow General Motors to develop and produce even more battery-powered vehicles as it aims to become an all-electric carmaker by 2035.

Barra made these comments at GM's annual shareholder meeting and said the company's EV plans are the "clear priority." Over at rival company Ford, a similar strategy is being applied. In March, the Blue Oval announced it would split its ICE and EV units into separate divisions; Ford Model e and Ford Blue. However, they won't be working separately.

Ford's CEO Jim Farley explained the restructuring would allow the two divisions to draw from each other but also allow a devoted EV engineering team to focus on world-beating products. "We need the ICE business to be cash-generating and serving [Ford's] iconic brands. We need our electric business...to be about innovation," he said at the time.

While the Mustang Mach-E continues to enjoy great popularity with consumers, its sales figures pale in comparison to ICE-powered vehicles such as the F-150, Explorer, and Escape - all three of which were best-sellers in 2021. It's very interesting to think that automakers are relying on strong ICE sales to finance present and future electric vehicles.

While vehicles such as the aforementioned Escalade-V may get a bad rap for their wasteful image and poor gas mileage, the success of future EV projects relies on strong sales of gas-guzzlers.