The Chevrolet Bolt EUV on display at the New York Auto Show on April 13, 2022.
Scott Mill | CNBC
DETROIT — After years of underwhelming performance and fire-induced recalls, the all-electric Chevrolet Bolt EV is finally gaining traction General Motors.
U.S. sales of the Chevrolet Bolt, the cheapest electric car in the U.S. after steep price cuts, rose more than 50% last year and the automaker says it will reach a record 70,000 units in 2023.
But GM Chief Executive Mary Barra said on Tuesday that rather than relying further on the car’s recent success and increased production, GM Chief Executive Mary Barra would stop production later this year. Hailed as the industry’s “true game changer” and “electric vehicle,” the car is for everyone. “
“We’ve made progress so far, and now it’s time to plan for the end of Chevrolet Bolt EV and EUV production, which will happen by the end of the year,” Barra told investors on an earnings call.
Barra’s comments about the vehicle being axed were as swift as a butcher cutting the head off a chicken, but combined with the company’s plans to produce profitable electric vehicles in the coming years, it says a lot.
GM is on track to generate single-digit profits from its electric vehicle portfolio by 2025, when it aims to have production capacity of 1 million electric vehicles in North America.
To achieve those goals, GM needs the production capacity, margins and market positioning of its forthcoming next-generation electric vehicle. It doesn’t think it needs a Bolt.
For industry experts, the Bolt’s days are coming to an end. But the timing of the decision caught many experts off guard. GM is expected to produce the car for at least the next year.
“It was more sudden than I expected,” said Michelle Krebs, executive analyst at Detroit-based Cox Automotive. “I think it will go away at some point when the new batteries come out and they come in more body styles, but it strikes me as rather abrupt.”
2024 Sierra EV Denali Edition 1
Source: General Motors
The timing of the announcement coincides with GM’s need to notify suppliers of the shutdown and related developments, a company spokesman said. The company is spending $4 billion to revamp its Bolt plant in Orion, Michigan, where it makes GMC Sierra and Chevrolet Silverado electric pickup trucks.
Retooling existing plants rather than building new ones is part of GM’s EV strategy, though it may do so in the future.other such as Ford and Hyundai announced new factories in addition to restructuring existing facilities.
GM said the reorganization would save time and money, and also give the company the flexibility to partially remodel factories and build different gas-powered models at the same time. But for the Orion plant, which makes the Bolt alone, this strategy doesn’t make sense because GM believes it needs the extra capacity. Plus, the Bolt won’t contribute to the company’s bottom line the way a factory that makes money-making gasoline-powered cars does.
Barra said on Tuesday that once Orion plants reopen next year, the company will have a combined annual capacity of 600,000 electric pickups, including a Detroit plant that has been slow to ramp up production of GMC’s Hummer EV.
“We need this capability because our trucks are exactly what customers expect, and we will demonstrate that work and EV range are not mutually exclusive terms for Chevrolet and GMC trucks,” Barra said Tuesday.
Profit tied to Ultium
GM has promised investors its next-generation electric vehicle based on a new architecture Known as Ultium, it will be profitable. This is a milestone that the Bolt model (including the larger “EUV” version) was never thought to reach.
To spark interest and make the Bolt more affordable, GM lowered the starting price by $6,300 for the 2022 model year. The Bolt EV starts at $26,595, followed by the Bolt EUV at $28,195.
“The Bolt is selling better than ever since the company cut prices. On the other hand, that probably means they’re losing more money than ever on the car,” said Guidehouse principal analyst Sam R. Abuelsamid (Sam Abuelsamid) said. opinion. “So, they don’t want it to last any longer. They’re losing money.”
U.S. President Joe Biden and General Motors CEO Mary Barra look at a Chevrolet Silverado electric vehicle during their tour of the 2022 North American International Auto Show at the Huntington Place Convention Center in Detroit, Michigan, September 14, 2022. -Biden is visiting auto shows to highlight electric vehicle manufacturing.
Mandel Yan | AFP | Getty Images
GM expects adjusted margins on its electric vehicle portfolio to be in the low to mid-single digits in 2025, excluding any positive impact from clean energy tax credits, such as those included in the Lower Inflation Act.
With those advantages in mind, the company said it expects its new electric vehicle portfolio to be as profitable as conventionally-engined cars and trucks by 2025 — many years earlier than many thought possible.
While those credits are likely to boost the Bolt’s margins as well, the car uses older battery technology purchased from LG, and GM is now focusing on expanding more cost-effective in-house battery production through its factories it operates as a factory. Joint venture with Korean company.
Ultium’s boost, combined with the cost efficiencies realized with the new EV pickup, means improved margins that the Bolt can’t, especially in the long run.
“As we scale up our electric vehicles, we will reduce our fixed costs and will continue to drive margin improvement,” Barra said on Tuesday.
Bolt will leave behind a mixed reputation. It was the first “affordable” long-range EV to hit the market, but it never lived up to its stated potential.
The Bolt brand name has also suffered after the company recalled all vehicles produced in 2020 and 2021 due to fire problems caused by a defect in the supplier’s manufacturer’s battery. At least 13 bolts spontaneously ignited due to this issue.
A 2019 Chevrolet Bolt EV caught fire at a home in Cherokee County, Georgia on Sept. 13, 2021, according to the local fire department.
Cherokee County Fire Department
Still, GM is touting the Bolt EV as a proof of concept for its electric future. The vehicles have attracted new customers, with 75 percent of Bolt owners switching from non-GM to non-GM vehicles, the company said.
Now, the company will need a new entry-level EV, and it’s looking to the upcoming Equinox EV (starting at around $30,000) to fill the void.
“We think this is a great opportunity for us to really start mass adoption, and we have that expectation for price; volume that we want to achieve,” Scott Bell, Chevrolet’s global vice president, said in a media briefing last year. “This is a game changer for us and for the industry.”
Whether the Equinox EV, which will be built at a factory in Mexico, can actually be more of a “game changer” than the Bolt can be determined when the car goes on sale later this year.
Barra told CNBC’s Phil LeBeau last year that GM expects production of the Equinox EV to be faster than current EVs. The car should be close to full production by the first quarter of next year, she said.