Here's when GM CFO Paul Jacobson expects EV costs will go down and why
Here's when GM CFO Paul Jacobson expects EV costs will go down and why
Jackie Charniga, Detroit Free PressMon, September 28, 2026 at 10:06 AM UTC
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General Motors isn’t planning to broaden its electric vehicle portfolio in order to sell more battery-powered cars ― the focus in the near term is on scaling cheaper and more effective vehicle batteries.
But according to the company’s chief financial officer, U.S. customers won’t see that this year or next.
Paul Jacobson, executive vice president and CFO at General Motors, said on Sept. 15 at Morgan Stanley’s Laguna Conference that deploying lithium manganese-rich (LMR) battery production at scale in 2028 is the next major step in the automaker’s long-term strategy to make EVs more popular and viable for American drivers.
By comparison, 2027 sales might be considered a “flat spot” on the company’s EV journey, he said.
“It’s really about going after the architecture, going after the makeup, going after the battery cell technology to bring down the cost of EVs,” Jacobson said. “The first big step of that will be in ’28 when we start to produce the LMR technology, which is premium and power load at the same cost as LFP.”
In the wide ranging conversation that also touched on the company’s sales strategies and inventory concerns, Jacobson noted that launching LMR batteries would mark a “stark improvement” in the range and value of a GM-made EV.
Though GM has scaled back its electric vehicle production to bring it more in line with consumer demand, leadership remains committed to EVs being the end game.
Developing batteries that are substantially cheaper to produce that retain the range capabilities consumers rely on is key to salvaging electric investments.
When GM announced in May 2025 that it planned to roll out LMR batteries jointly with its venture partner LG Energy Solution, the automaker said the chemistry performed at a 33% higher energy density than the best-performing lithium iron phosphate-based cell, the current industry standard.
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Requiring less nickel, a high cost component in the standard batteries, and using a “prismatic” battery cell shape that stores energy more efficiently, will lower battery costs, which represent at least a third of the total cost of an EV.
That cost savings equates to “thousands of dollars per vehicle at the pack level,” Jacobson said on Sept. 15.
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“We still believe EVs are a long-term play for us. And we’ve got to get it right. We got to get them profitable,” Jacobson said. “And I think with the investments that we’re making, we’re continuing on that journey more than many of our competitors are.”
Discussing the company’s EV strategy was one among many topics covered at the conference. Here are insights from other topics.
GM discounts and market share
Jacobson outlined where the automaker stands on inventory management and sales concerns into the back half of the year.
Still, GM has no plans to break with its incentive strategy in order to move more metal. Consumers shouldn’t expect steep discounts because the automaker is worried about losing market share.
“When we see monthly share numbers kind of trickle up and down because of what a competitor is doing, I wouldn't say we’re not aware of it. We’re very aware,” Jacobson said.
But, he added: “We’re not hyper focused on it to the point that says, ‘OK, well, we've got to go discount everything to sell 2,000 more units.’ It's not good for the enterprise. It's not good for the equity and the residual value of the vehicles that you sold. So really, focusing on that long-term customer value proposition is what’s navigated us.”
Another factor potentially shielding the automaker from increasing incentive activity?
Low inventory.
Facing short supply of popular vehicles
GM leaders warned earlier in the year that pickups and large SUVs, GM’s most popular and profitable products, were running in short supply after ravenous consumer demand.
GM has managed its inventory as best as it could while maximizing production of its most popular products, Jacobson said, but he anticipates the company won’t take a hit until it reports fourth-quarter sales, which are typically “seasonally weaker” than earlier quarters.
“This year, it’s compounded by the fact that, as we disclosed on our last call, we’ll lose about 35,000 trucks with the changeover,” he said. “Ultimately, a long-term good thing, but we’ll have that little headwind.”
Jackie Charniga covers General Motors for the Free Press. Reach her atjcharniga@freepress.com.
This article originally appeared on Detroit Free Press: Here's when GM CFO Paul Jacobson expects EV costs will go down and why
Source: “AOL Money”
