Here's why the auto industry got the EV adoption timeline wrong

Jacobson also said people typically draw straight lines when describing the path to EV adoption, "when the reality is it's going to be choppy."

In response to the choppiness, GM, in part because of demand, delayed starting EV truck production by one year at its Orion Assembly Plant. The electric Chevrolet Silverado and GMC Sierra EV will still be built as scheduled at GM's Factory Zero Detroit-Hamtramck Assembly Center.

GM and Honda Motor Co. Ltd. also canceled a joint affordable electric vehicle program, eliminating a $5 billion earmark at GM. The automaker is instead invested in bringing back the affordable electric Chevrolet Bolt built on GM's flexible Ultium platform using cheaper lithium iron phosphate (LFP) batteries.

In sticking with the Bolt, whose previous generation ended production last year at Orion, GM "saved billions of dollars in capital because it's much easier to do that than it is to go create a whole new line and launch those vehicles," Jacobson said at the Automotive Summit.

GM is pushing to have "a lot of capital discipline and a lot of responses to what you've seen in the market changing," he said, adding everyone on GM's leadership team is focused on getting EVs profitable in 2025.

After battling launch issues in 2023 and software problems causing a stop sale on the Chevrolet Blazer EV, GM's entry-level brand says it will have cheaper options for consumers. It recently lowered the Blazer's pricing so it now starts at $50,195, and customers can now access the $7,500 federal tax incentive. Chevrolet will also have an entry-level trim of the Blazer that will start under $50,000.

GM plans to offer an electrified Equinox priced at $34,995 later this year, and next year, it'll bring back the affordable electric Bolt.

On the luxury end, Cadillac has a major electric launch year in 2024 with the Escalade IQ coming this summer, the Optiq, an entry-point compact SUV, landing at the end of the year and the Vistiq three-row SUV coming early next year. For EV customers, Cadillac currently just has the Lyriq SUV on dealer lots, and it will offer a $300,000-plus Celestiq EV for ultra-luxury customers.

After a bumpy launch in 2022, Cadillac sold just over 9,000 of the Lyriq SUVs in 2023, with momentum building into 2024. The Lyriq's sales in the first quarter of this year will make up between 17% and 20% of Cadillac's overall sales on any given day, Roth said, up from 12.5% in the fourth quarter.

"Have things slowed or has the tip of the scale come down a little bit, sure," he said. "But we do know luxury buyers are telling us that around 60% of the time, they're looking to buy an EV or at least shop an EV for their next purchase.

"When you have a good EV experience, and you hit the three characteristics that make a good EV — great styling, great range performance and price value equation ... it's producing sales momentum."

Tesla's valuation

Also no secret is the envy in the auto sector of Tesla's valuation. The Texas-based EV maker's market capitalization was $560 billion at the close of trading Thursday, with stock exchanges closed for Good Friday. That's compared to General Motors Co.'s $52.4 billion, Ford Motor Co.'s $52.8 billion, Stellantis NV's $85.2 billion and Toyota Motor Corp.'s $339 billion on the New York Stock Exchange.

"They see Tesla stock price, and they said, 'Me, too,'" said Warren Browne, an auto supplier consultant and former GM executive who worked at the carmaker for 40 years. "There was a failure to realize that Tesla doesn't have a value proposition problem. They don't have internal combustion engine vehicles in the showroom.

"Salespeople are trying to explain why (customers) need to spend 15% more on this vehicle. The vision looked good on paper, but when it hit the showroom, reality happened," Browne said. "They failed to understand that this was just a powertrain option and not a substitute vehicle."

In 2016, Tesla CEO Elon Musk revealed the Model 3, a sedan priced at $35,000 and started delivering the vehicle in late 2017. Model 3's arrival, among other factors, set off alarm bells across the industry that sped up the electric push. By 2019, Tesla reported sales of 367,500 vehicles globally, a 50% increase over the previous year. The Model 3 was followed by the Model Y with a starting price of $39,000. By 2023, Tesla sold 1.8 million EVs globally, with 1.7 million of those being the Model 3 and Model Y.

"When they looked at the success Tesla had, especially in the past several years, in terms of them finally getting some meaningful volumes ... I think that says to the industry, 'Hey, if you can make a viable product that's an EV, people will buy it,'" said David Whiston, an autos equity strategist at Morningstar Research. "That's a bit simplistic, though, because Tesla still has something no one else has, which is an excellent charging network."

Automaker after automaker, including GM and Ford, have now partnered with Tesla to get their EV customers access to the Tesla Supercharger network.

Whiston said while "everybody got a bit aggressive on where we'll be by late '23 and '24," that doesn't mean "EVs are dead."

For GM, the more affordable Equinox EV will be the test to see if the demand is there now, he added: "If it flops, then it's going to be a few more years before we can probably see meaningful EV demand. It doesn't make sense to me that only Tesla can do well in EVs."

Ford's Gjaja said most EV buyers seem to like their EVs. He said globally, Ford's EVs have a 70-80% loyalty rate, and technology advancements will help to lower prices and get more customers into them.

"In the U.S., once people change their behavior, once they get used to the car, they love how it drives, they love the efficiency of it and the cost of operation," Gjaja said. "We feel confident in the technology that it'll continue to improve."

Added analyst Ives: "Many stayed with flip phones until they went to an iPhone. Now, they can't ever imagine going away from an iPhone. Rome wasn’t built in a day. Neither will the EV industry."