Published on March 8th, 2018 | by James Ayre0
GM CEO Says Chevy Bolt Production To Be Increased, Doesn’t Say By How Much
March 8th, 2018 by James Ayre
It’s hard to tell exactly what GM CEO Mary Barra actually intends with regard to Chevy Bolt EV sales. Is GM actually trying to sell the model in high numbers? If that’s the case, then why is advertising non-existent, and why aren’t dealers pushing the models?
Does the company not yet make enough of a profit per unit sold (owing to battery cell costs) to justify high sales? Is the model just meant to meet CARB requirements and to generate positive PR until battery cell costs drop more? Is Barra actually pushing for higher sales but being stonewalled by the GM board of directors? Who can truly tell at this point?
With those questions in mind, it’s interesting to note that Barra was recently quoted as saying that production of the Chevy Bolt would be increased within the near future, on the back of strong demand.
By how much will production be increased? Who knows? The GM CEO didn’t say.
“We feel tax credits should be expanded so our customers continue to receive the benefit going forward,” stated Barra, while speaking at an energy conference in Houston, Texas. “We believe in an all-electric future.”
The comments came at the same time that Barra has been lobbying the US Congress to extend the current federal EV tax credit beyond 200,000 vehicles per manufacturer, interestingly.
Which suggests that perhaps part of the reason that GM has been hesitant to push the Chevy Bolt too much has been due to worries about what happens when the federal tax credit no longer applies to plug-in electric vehicles sold by GM. Sales for the manufacturer could drop off a cliff once the federal tax credit no longer applies, it should be realized.
This is especially true since Tesla Model 3 production is continuing to ramp up, meaning that it won’t be too much longer (1–2 years) before Tesla would cause problems for GM through lower Chevy Bolt sales.
I heard some rumors a while back that GM was likely intending to lower pricing for the Chevy Bolt to ~$30,000 once the federal EV tax credit wore off, which would allow the company to undercut Tesla on pricing, and thus to still maintain strong sales despite the many seemingly advantages of the Tesla Model 3.
I also heard counterpoints to these rumors, to the effect that there was no way that GM could sell the Chevy Bolt at that price point without losing money. The actual per-unit margin with regard to the Chevy Bolt remains an unknown.
If true, the latter would certainly help to explain why the company has seemingly been dragging out the passing of the 200,000 electric vehicles sold mark (the point at which the federal EV tax credit begins to taper off) — to provide more time for battery prices to fall, and thus for Chevy Bolt production prices to as well.
Back to the news at hand, and away from speculation, Reuters provides more:
“Barra also called on US regulators to take into account when scoring automakers’ emissions the potential for autonomous ridesharing vehicles to reduce carbon dioxide emissions and petroleum consumption. The Trump administration is reviewing whether Obama administration emissions standards that called for roughly doubling average US vehicle fuel efficiency by 2025 are appropriate.
“GM has sold more than 160,000 plug-in and full-electric vehicles eligible for the credit. The $7,500 consumer tax credit phases out over a 12-month-period soon after an automaker hits the 200,000 mark and the largest US automaker is expected to hit the mark later this year…GM sold about 26,000 Bolt EVs worldwide last year, mostly in the United States. The company declined to say how much it would hike production when it adds production later this year at an assembly plant north of Detroit.”
Interesting news overall. Given that GM sold just about the number of Chevy Bolts in 2017 to allow it to maximize the avoidance of penalties in California and the states that follow similar manufacturer fleet emissions rules, one has to wonder how much Bolt production will be increased.
Have battery cell costs fallen enough that GM is gearing up to finally push sales of the model? Your guess is as good as mine at this point.
On a related note, Tesla looks likely to pass 200,000 electric cars sold in the US sometime in the next 6 months, or even in the next quarter (more likely than not). Once that mark is surpassed, the phaseout of the federal EV tax credit will begin the following quarter (only, of course, for Tesla).