HomeResearch & Knowledgeback to Homeback to Research & KnowledgeBack to the future: GM and the electric vehicleback to

Case Study

Back to the future: GM and the electric vehicle

16 pages

December 2014

Reference: IMD-7-1631

How should organizations balance pressures to decrease short-term costs at the expense of long-term profitability? How “long” is the long-term? What is the cost of innovation? These are the questions that CEO Mary Barra must face when leading General Motors (GM) into the 21st century. GM became the world’s first mass-produced electric vehicle retailer when it released the “EV1” in 1996. However, GM canceled the program in 2002, citing high costs, a limited market for electric vehicles, and the lack of technology available to make high-performance vehicles. The emergence of Tesla Motors in 2006 and its exponential growth in the electric vehicle market has proven otherwise. Ironically, Tesla Motors began with the same technology that GM already had access to with only a fraction of GM’s resources. The rapid rise of Tesla Motors in the electric vehicle market and the subsequent bankruptcy of GM suggest that GM made the wrong decision to abort its electric vehicle program in 2002. However, it is unclear how GM should proceed. In 2015, the company will launch its first all electric vehicle since the EV1, the Chevrolet Spark. To what extent should GM enter the electric vehicle sector? Tesla Motors is already scheduled to release a more affordable car in the next two years and has been proving its autonomous driving technology. Other automobile manufacturers have also released all-electric vehicles, including BMW, Nissan, Ford and Toyota. Hydrogen fuel cell technology is also on the rise and may be a promising alternative to electric vehicles. Lastly, the Asian markets are leading the demand for automobiles. Place yourself in the shoes of Mary Barra. What should GM’s strategy be in order to regain its stature as the world’s leading automobile manufacturer?

Learning Objective

When organizations are first established, their success largely depends on their value proposition and unique offering to the market as they achieve their vision. But then what? Often times, large organizations become entrenched in their existing revenue streams and forget to iterate on their long-term vision. The case of GM illustrates the importance of continuously iterating upon a long-term vision and constantly moving towards it.

Keywords

Sustainability, Long-term Strategy, Vision, Innovation

Settings

World/global, United States of America
General Motors, Tesla, Automotive
1908-2014

Type

Published Sources

Available Languages

English

Related material

Teaching note

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Article

Team Healing - High Performance

Find out how a simple diagnostic tool and roadmap can rebuild trust within dysfunctional teams – the first crucial steps toward team healing and a future of high performance.

By Michael D. Watkins

in I by IMD

Article

Leading Global Operations - Complexity and Change

Leading global operations through complexity and change in 2025 means embracing AI and ML to streamline supply chains and meet rising demands.

Artificial Intelligence Digital Leadership Strategy Supply Chain

By Ralf W. Seifert and Katrin Siebenbürger Hacki

in I by IMD

Article

6 Ways to Attract And Retain Female Tech Talent

McKinsey estimates there will be a tech talent gap of between 1.4 and 3.9 million in Europe by 2027. Doubling the number of women in the field is a major part of the solution. Sarah E. Toms suggest ways tackle the alarming gender disparity.

Diversity and Equity and Inclusion Technology Management

By Sarah E. Toms

in I by IMD

Article

Trump Trade Tactics - The Art Of The Deal meets global trade

Guided by The Art of the Deal, Trump's trade tactics are disrupting global supply chains and driving strategic diversification.

Economics Geopolitics Global Business Supply Chain

in I by IMD

Article

Currency of Trust - Stakeholder capitalism

Corporate governance reform is essential if ESG goals are to succeed. Restoring the currency of trust is key to stakeholder capitalism.

By Jordi Gual

in I by IMD

Article

Circular leadership - Audemars Piguet

Audemars Piguet CEO Ilaria Resta leads with circular leadership—blending tradition, innovation, and empathy to reshape the future of Swiss luxury.

Leadership

By Stéphane J. G. Girod and Jana M. Arden

in I by IMD

Article

Building vs Buying Talent - CHRO Circle

In the Building vs Buying Talent debate, internal growth reduces CEO risk—if leadership development and succession planning are aligned. Ric Roi shares how.

Do you know how to attract the best Gen Z talent?

Gen Z is often drawn to the dynamic nature of purpose-filled startups in career terms. Test your knowledge of the cohort here – and read on to see how established companies can compete for Gen Z talent. Gen Z is often drawn to the dynamic nature o...

By Lars Häggström

in I by IMD

Article

Values-led Leadership - Inclusion - Business Schools

Business schools must champion values-led leadership as companies retreat from DEI. Now’s the time to stand firm and lead by example, says David Bach.

Leadership

By David Bach

in I by IMD