General Motors (GM) is making waves throughout the car community after announcing on its Q1 2023 earnings call that it plans to end Chevrolet (Chevy) Bolt electric vehicle (EV) and electric utility vehicle (EUV) production by the end of the year. The news comes just weeks after GM overtook Ford to become the number-two selling EV maker in the United States behind Tesla. GM posted Q1 Chevy Bolt sales totaling 19,700 units.
On the surface, the announcement seems like GM is cutting back on its EV investments. However, the move to end Bolt production is simply part of the company’s plan to produce 400,000 EVs between 2022 and the first half of 2024 under GM’s Ultium Platform. The closest direct replacement for the Bolt is the Chevy Equinox EV, a similar compact EV launching in fall 2023. In addition to the Equinox, the highly anticipated Silverado EV is also launching in fall 2023.
This year is slated to be GM’s breakout year along its EV transformation roadmap. By the end of 2023, the company’s Ultium Platform is expected to include the Chevy Blazer EV and Equinox EV in the midsize category, the Cadillac LYRIQ and CELESTIQ in the luxury category, the GMC Hummer EV Pickup and Chevy Silverado EV in the full-size truck category, and the BrightDrop Zevo 600/400 and the Chevy Silverado EV in the commercial truck category.
GM’s legacy internal combustion engine (ICE) portfolio continues to provide the foundation needed to fuel the company’s EV investments. GM raised its full-year 2023 guidance and now expects to earn adjusted earnings before interest and taxes of US$11 billion to US$13 billion thanks to steady growth across its ICE portfolio. Between 2020 and 2025, GM expects to invest US$35 billion in EVs and automated vehicles, which is more than it plans to spend on ICE vehicles.
GM is partnering with LG Energy Solutions and Samsung SDI to develop reliable battery cell manufacturing as it scales EV production. Access to batteries has been one of the biggest headwinds facing EV makers over the last few years as legacy automakers looking to diversify their offerings have clashed with pure-play EV companies to secure batteries and components.
The Chevy Bolt’s popularity largely stemmed from its price, which starts at US$26,500. The Equinox is estimated to start at a similar price. Meanwhile, GM EV versions of popular ICE offerings are expected to be cost comparable when factoring in tax credits. GM is directly targeting the lower end of the EV market, which is something that newer car companies simply cannot do. GM is relying on high volume and low margins to profit from EVs, while smaller companies must rely on lower volumes and higher margins.
The benefits of EVs have long been recognized. Although the industry has come a long way, it still lacks the affordability that ICE vehicles offer. Luxury EV automakers have a role to play, but the real needle movers will be the legacy automakers like GM that will take ICE vehicles off the road and replace them with EVs. It’s no secret that the transportation industry accounts for the largest share of carbon dioxide emissions in the United States. Affordable EVs, both for passenger vehicles and commercial vehicles, represent one of the greatest near-term solutions to combat climate change.
General Motors (GM) is making waves throughout the car community after announcing on its Q1 2023 earnings call that it plans to end Chevrolet (Chevy) Bolt electric vehicle (EV) and electric utility vehicle (EUV) production by the end of the year. The news comes just weeks after GM overtook Ford to become the number-two selling EV maker in the United States behind Tesla. GM posted Q1 Chevy Bolt sales totaling 19,700 units.
On the surface, the announcement seems like GM is cutting back on its EV investments. However, the move to end Bolt production is simply part of the company’s plan to produce 400,000 EVs between 2022 and the first half of 2024 under GM’s Ultium Platform. The closest direct replacement for the Bolt is the Chevy Equinox EV, a similar compact EV launching in fall 2023. In addition to the Equinox, the highly anticipated Silverado EV is also launching in fall 2023.
This year is slated to be GM’s breakout year along its EV transformation roadmap. By the end of 2023, the company’s Ultium Platform is expected to include the Chevy Blazer EV and Equinox EV in the midsize category, the Cadillac LYRIQ and CELESTIQ in the luxury category, the GMC Hummer EV Pickup and Chevy Silverado EV in the full-size truck category, and the BrightDrop Zevo 600/400 and the Chevy Silverado EV in the commercial truck category.
GM’s legacy internal combustion engine (ICE) portfolio continues to provide the foundation needed to fuel the company’s EV investments. GM raised its full-year 2023 guidance and now expects to earn adjusted earnings before interest and taxes of US$11 billion to US$13 billion thanks to steady growth across its ICE portfolio. Between 2020 and 2025, GM expects to invest US$35 billion in EVs and automated vehicles, which is more than it plans to spend on ICE vehicles.
GM is partnering with LG Energy Solutions and Samsung SDI to develop reliable battery cell manufacturing as it scales EV production. Access to batteries has been one of the biggest headwinds facing EV makers over the last few years as legacy automakers looking to diversify their offerings have clashed with pure-play EV companies to secure batteries and components.
The Chevy Bolt’s popularity largely stemmed from its price, which starts at US$26,500. The Equinox is estimated to start at a similar price. Meanwhile, GM EV versions of popular ICE offerings are expected to be cost comparable when factoring in tax credits. GM is directly targeting the lower end of the EV market, which is something that newer car companies simply cannot do. GM is relying on high volume and low margins to profit from EVs, while smaller companies must rely on lower volumes and higher margins.
The benefits of EVs have long been recognized. Although the industry has come a long way, it still lacks the affordability that ICE vehicles offer. Luxury EV automakers have a role to play, but the real needle movers will be the legacy automakers like GM that will take ICE vehicles off the road and replace them with EVs. It’s no secret that the transportation industry accounts for the largest share of carbon dioxide emissions in the United States. Affordable EVs, both for passenger vehicles and commercial vehicles, represent one of the greatest near-term solutions to combat climate change.
