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Every carmaker is trying to figure out how to make the leap beforegovernments force it and Tesla and other start-ups lure awaydrivers.

By Neal E. Boudette and Coral Davenport

Jan. 29, 2021

A new president took office this month determined to fight climate

change. Wall Street investors think Tesla is worth more than

General Motors, Toyota, Volkswagen and Ford put together. And

China, the world’s biggest car market, recently ordered that most

new cars be powered by electricity in just 15 years.

Those large forces help explain the decision by G.M.’s chief

executive, Mary T. Barra, that the company will aim to sell only

zero-emission cars and trucks by 2035.

Her announcement, just a day after President Biden signed an

executive order on climate change, blindsided rivals who usually

seek to present a united message on emissions and other policy

issues. But it was also years in the making. G.M. has had a love-

hate relationship with electric cars going back decades, but under

Ms. Barra, who took over in 2014, it has inched its way toward a full

embrace of the technology.

She has also shown a penchant for making big moves that her

predecessors might have considered brash or impulsive given the

company’s reputation for deliberate — or plodding to some —

decision making. When Donald J. Trump became president, she

pushed him to relax Obama-era fuel economy standards that G.M.

had endorsed when they were put in place. Then, after Mr. Trump

lost his re-election bid in November, Ms. Barra withdrew from a

lawsuit seeking to prevent California from maintaining its own

high fuel standards.

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Now, others are searching for the right response to Ms. Barra’s

latest tack. The reaction from automakers and oil and gas

companies has so far been muted. But Washington is abuzz with

corporate lobbyists complaining in private about what they saw as

a calculated move to burnish G.M.’s and Ms. Barra’s reputations

even as the industry negotiates a new fuel-economy deal with the

Biden administration.

A senior G.M. executive, Dane Parker, said the company was not

seeking to curry favor with the new administration. Its decision, he

argued, was based on a fundamental, dollars-and-cents analysis of

where the auto industry is headed and the cars that it expects to

become best sellers in the future.

“We are doing this to build a sustainable business,” Mr. Parker, the

company’s chief sustainability officer, said in an interview on

Friday. “We want to have a business in 15 years that’s a thriving

business.”

G.M. has already committed to spending $27 billion to introduce 30

electric vehicle models by 2025, and is building a plant in Ohio to

make batteries for those cars and trucks. Mr. Parker said the

company was looking at sites for more battery plants and working

on future electric models.

“To be ready for 2035, I need to build battery plants, I need to do

battery development, I need to develop electric vehicles,” he said.

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One key driver of that analysis: On his first day in office, Mr. Biden

signed an executive order directing the Environmental Protection

Agency to immediately begin developing tough new tailpipe

pollution regulations, designed to rein in the nation’s largest source

of planet-warming pollution. G.M.’s announcement gives powerful

political momentum to that plan, signaling that the nation’s biggest

automaker supports the administration’s single largest policy to

fight climate change.

Broadly, of course, the industry had been quietly gearing up for

months for a possible change in the White House. Representative

Debbie Dingell, Democrat of Michigan and a former G.M.

executive, said in an interview, “I had been saying to all the autos:

‘When Joe Biden gets elected, your world will turn upside down.

You’ve got to be at the table or else this thing gets jammed down

your throat.’”

Ms. Dingell is starting to see that effort bear fruit, as other auto

companies are expected to quickly come out in support of Mr.

Biden’s plans.

But while G.M.’s U-turn materialized in the weeks after the

election, five of its competitors — BMW, Ford, Honda, Volkswagen

and Volvo — had already legally bound themselves to tougher fuel

economy standards in a deal with California. G.M. is not party to

that agreement and can operate under the Trump rules until Mr.

Biden’s policies are enacted, potentially giving the company more

time to invest in research and technology.

When Mr. Trump was president, Ms. Barra told him that the

Obama-era rules were too hard on manufacturers, requiring them

to sell passenger vehicles that averaged 54.5 miles per gallon by

2025. Mr. Trump relaxed the standards to roughly 40 miles per

gallon, which would require no new technology — and would have

allowed the emission of nearly a billion more tons of heat-trapping

carbon dioxide.

The five auto companies that signed the deal with California

committed to an average fuel economy of 51 miles per gallon by

2026 and had to start ratcheting up their standards with cars sold

in 2021 in the state.

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The Biden administration is widely expected to follow the terms of

that California deal as it seeks to impose new federal rules, but

they are unlikely to be completed and in effect until 2023 at the

earliest.

“From my perspective, G.M. is still in the environmental

doghouse,” said Drew Kodjak, executive director of the

International Council on Clean Transportation, a research and

advocacy organization that works on emissions reduction policy.

“That doesn’t mean G.M.’s statement is not important and

groundbreaking, but the proof will be in the pudding.”

A G.M. spokesman said the company had not opposed the higher

standards sought by California but supported the Trump

administration because it thought having a single national

standard was more important. G.M. had some reason to tread

lightly. Mr. Trump had publicly attacked the company and Ms.

Barra several times, including for a decision to close a plant in Ohio

and increasing production in China.

Ms. Barra still has a prime seat at the White House negotiating

table. On Thursday, she spoke by telephone to Gina McCarthy, Mr.

Biden’s top domestic climate change adviser, who will play a lead

role in creating the new auto rules, and Brian Deese, the head of

the White House National Economic Council, according to a person

familiar with the conversations.

While no other large automakers have set a target date for selling

only electric vehicles, many have moved in that direction. Ford is

spending billions to introduce battery-powered models. Customer

deliveries of the first of them, the Mustang Mach E sport utility

vehicle, started last month. Volkswagen said last year that it

planned to spend 73 billion euros ($88 billion) on electric vehicles

over the next five years.

The industry is afraid of losing market share to Tesla, the dominant

electric carmaker, which is growing rapidly. Wall Street values

Tesla at about $752 billion, about 10 times as much as G.M. Several

start-ups, like Rivian and Lucid Motors, are hoping to follow Tesla’s

footsteps this year.

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And China’s decision late last year to require that most vehicles

sold there be electric by 2035 is also critical because G.M. sells

more cars in that country through its joint ventures than in the

United States. And Britain, Ireland and the Netherlands have said

they will ban sales of new gasoline and diesel cars starting in 2030.

G.M. has been talking about moving to zero-emissions vehicles for

about two years. Last March, it unveiled modular battery

technology that it said would lower costs. A few months later, G.M.

said it could reach a point where electric vehicles cost no more

than gasoline-powered ones more quickly than it had previously

expected.

Ms. Barra was getting support and input from an unexpected

source — the Environmental Defense Fund, which had criticized

G.M. in the past. The chief executive had shared a barbecue dinner

with the group’s president, Fred Krupp, at a conference in 2015, and

by last fall they were in regular contact by phone and email.

“We both had an optimism we could reach common ground,” Mr.

Krupp said.

In October, G.M. unveiled a Hummer electric pickup truck, and

within a day it had collected enough orders to account for all the

trucks G.M. planned to make in the truck’s first year.

“That was another inflection point,” Mr. Parker, the chief

sustainability officer, said. “It showed consumers really are very

excited about owning electric vehicles.”

Just a few weeks later, Mr. Biden became the president-elect. And

by December, G.M. was meeting with his transition team, Mr.

Parker said. “Our vision of a zero-emissions future aligns very well

with their vision and their goals.”

At the same time, G.M. signed a pledge, known as the Business

Ambition for 1.5 Degrees, to combat global warming. By early

January, the company was homing in on 2035 as the likely date for

the electric transition, Mr. Parker said. On Jan. 12, Ms. Barra

appeared at the Consumer Electronics Show and detailed G.M.’s

vision of a future with no tailpipe emissions, but gave no specific

date.

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Mr. Biden was sworn in on Jan. 20, and a week later, G.M.

announced the end of the internal combustion engine, the

technology that has been at the heart of the company, and one of

the world’s largest industries, for decades.

“This is a big thing,” Mr. Krupp said. “It really does send a signal

that this is the way things are going, and G.M. is going to play their

part in accelerating it.”

Jack Ewing contributed reporting.

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G.M. Announcement Shakes Up U.S.Automakers’ Transition to Electric Cars

An electric Chevrolet Bolt charging up in Baker, Calif. General Motors announced this week that it wouldphase out the internal combustion engine by 2035. Philip Cheung for The New York Times

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A Bolt factory in Lake Orion, Mich., in 2018. G.M. plans to spend $27 billion to introduce 30 electric vehiclemodels by 2025. Rebecca Cook/Reuters

Ford is spending billions to introduce a slew of battery-powered models over the next several years,including the Mustang Mach E. Ryan Young for The New York Times

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