You only need to look at Tesla to realize that making money building and selling electric cars is tough duty. Tesla has lost money in almost every quarter since it started in business, even though its larger cars sell for $80,000 or more and its new midsize Model 3 costs up to $50,000 in top level trim.
Speaking at the UBS Global Industrials and Transportation Conference on Wednesday, General Motors president Mark Ruess told the audience his company will soon be able to sell electric cars at “very average transaction prices.”
The average price of new cars and light trucks in America today is over $37,000, which just happens to be the starting price of the Chevy Bolt, the first and only all electric car from GM. So far as anyone knows, GM is losing money on every Bolt it sells.
According to a report by Yahoo Finance, Reuss told the group his company’s EV technology is engineered to be low cost and to make money without charging luxury car prices. That’s a bit curious, since the company also said recently that its EV offerings would mostly be assigned to its Cadillac division, which last time we checked is not in the business of selling cars to budget minded customers.
Reuss added that the cost of building an electric car is coming down while the cost of adding technology to conventional gas burners to make them meet regulations is going up. “We’ll reach parity a lot sooner than people think. We’re driving down the cost of batteries and the whole EV in general.”
GM announced in 2017 that it plans to have 20 all electric models on sale globally by 2023. The emphasis there is on the word “globally.” That’s code for “We’re pushing really hard to exploit the EV market in China. What happens in the US where our friends in the oil business control the government is not really much of a concern to us at the present time.”
Certainly it has been slow to leverage the technologies it developed for the Volt plug-in hybrid and the Bolt electric car. Most companies try to spread their R&D costs over as many production vehicles as possible in order to lower their per-unit costs, but The General seems to think limiting production is a better way to go. Maybe it knows something the rest of the manufacturing world doesn’t?