GM sells Opel; is plan to switch to electric cars by 2030 now in limbo?


2014 Opel Astra OPC Extreme

2014 Opel Astra OPC Extreme

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GM said today it will sell its European Opel division to PSA Peugeot Citroën, the French parent of the Citroën, DS and Peugeot brands, for 2.2 billion euros (approximately $2.33 billion).

Among the questions surrounding the sale—which includes the U.K.-market Vauxhall brand—is where the change in ownership leaves Opel's electric-car plans.

General Motors has controlled Opel for more than 90 years, but under CEO Mary Barra, it has focused relentlessly on profit over sales volume. The Opel division has lost almost $20 billion over the past two decades.

DON'T MISS: Strong demand for Opel Ampera-e in Norway moves up launch date

Currency fluctuations due to Brexit kept Opel from reaching its 2016 breakeven goal. It lost $257 million, after the previous year's $813 million loss. Opel provided one-tenth of GM's global sales—but represented 18 percent of its workforce.

The deal between GM and PSA could put Opel's ambitious electric-car plans in limbo.

Months before the talks between GM and PSA began, Opel CEO Karl-Thomas Neumann began working on a plan to convert the brand entirely to electric cars by 2030, German business publication Manager Magazin reported last month.

Opel Ampera-e

Opel Ampera-e

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Neumann was concerned the Opel division would not have the resources to develop both electric and internal-combustion cars in the coming years, according to the report.

With a German proposal in Opel's home market to end sales of new internal-combustion cars within 15 years, Neumann reportedly felt it more important to prioritize electric cars.

Opel is just launching sales of a rebadged Chevrolet Bolt EV as the Ampera-e, and Neumann apparently planned to adapt that vehicle's platform to other models.

CHECK OUT: 2017 Opel Ampera-e (nee Bolt EV) to debut at Paris Motor Show (Aug 2016)

As GM's first mass-market, long-range electric car, the Bolt EV/Ampera-e is an important car—and it might not seem that it would want to license its marquee technology to a future competitor.

On the other hand, Opel would be damaged by the abrupt withdrawal of its anticipated all-electric car.

Indeed, last month Automotive News (subscription required) reported that GM may allow PSA to license its electric-car technology if the sale of Opel went through, also citing Manager Magazin.

Electric Odyssey: Citroen C-Zero around the world

Electric Odyssey: Citroen C-Zero around the world

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News reports this morning indicate that the two companies will work together on future electrification, and PSA may source hydrogen fuel-cell systems from a GM-Honda joint venture.

PSA has no battery-electric cars of its own design. It sells versions of the aging Mitsubishi i-MiEV as the Peugeot iOn and Citroen C-Zero.

It has sold tens of thousands of Peugeot and Citroen through-the-road plug-in hybrids, using the diesel engines popular in Europe.

Combining Opel with PSA is expected to generate annual savings of 1.7 billion euros by 2026 from such synergies as shared R&D, manufacturing, and procurement.

PSA and Opel deliveries together totaled 4.3 million vehicles last year, giving the merged automaker 17 percent of the European market, second only to VW Group.

“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage," said PSA CEO Carlos Tavares in a statement.

"We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities."

The buyer, PSA, is backed both by the French government and state-owned Chinese automaker Dongfeng.

2017 Opel Insignia Grand Sport

2017 Opel Insignia Grand Sport

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Before the sale, German politicians sought assurances that Opel would remain a German company. They expressed concerns over the security of jobs at German Opel factories, as did U.K. officials over Vauxhall jobs.

The U.K. decision to leave the European Union—commonly referred to as "Brexit"—was thought to be a motivating factor in GM's decision to sell its European operations, to to the increased uncertainty it creates for the European market.

Prior to discussing a possible sale, GM and PSA entered into an agreement to jointly develop small cars for the European market.

The first of those cars will be unveiled at this week's 2017 Geneva Motor Show.

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