GM to Stop Producing the Chevy Volt, the Cheapest Electric Car in the U.S. Market
GM to End Production of Chevy Bolt EV
After years of lackluster performance and a fire-provoked recall, the all-electric Chevrolet Bolt EV was finally gaining traction for General Motors. As America’s cheapest EV following significant price cuts, U.S. sales of the Chevy Bolt were up more than 50% last year and the automaker said it would make a record 70,000 units in 2023.
But instead of leaning further into the vehicle’s recent success and increased production, GM CEO Mary Barra on Tuesday said the automaker would end production later this year of the vehicle she once hailed as a “real game-changer” for the industry and an “EV for everyone.”
“We have progressed so far that it’s now time to plan to end the Chevrolet Bolt EV and EUV production, which will happen at the very end of the year,” Barra told investors during an earnings call.
Why End Production?
- GM needs the production capacity, profits and market positioning of its forthcoming next-generation EVs.
- GM expects to earn low to mid-single-digit adjusted profit margins on its EV portfolio in 2025, excluding any positive impact of clean energy tax credits.
- The Bolt models, including a larger “EUV” version, never achieved profitability.
GM has promised investors its next-generation EVs, built on a new architecture known as Ultium, would be profitable. That’s a milestone that the Bolt models never achieved. To spur interest and make the Bolt more affordable, GM cut the starting prices by as much as $6,300 for the 2022 model year. The Bolt EV would start at $26,595, followed by the Bolt EUV at $28,195.
“Bolt is selling better than it ever has since the company dropped the price. On the other hand, that probably also means that they’re losing more money than they ever have on that car,” said Sam Abuelsamid, a principal analyst at Guidehouse Insights. “So, they don’t want to keep it going longer. They’re losing money on it.”
What’s Next for GM?
GM is on a path to deliver single-digit profits off its EV portfolio by 2025, when it aims to have a production capacity of 1 million electric vehicles in North America. GM expects to earn low to mid-single-digit adjusted profit margins on its EV portfolio in 2025, excluding any positive impact of clean energy tax credits such as those included in the Inflation Reduction Act.
GM will need a new entry-level EV, and it’s looking to the upcoming Equinox EV, starting at around $30,000, to fill that void. Whether the Equinox EV can serve as more of a “game-changer” than the Bolt truly could be determined later this year when the car goes on sale.
Expert Opinions
To industry experts, the writing was on the wall for the Bolt’s end of days. But the timing of the decision caught many experts off guard. Expectations were GM would produce the vehicle at least into next year.
“It was more sudden than I expected,” said Michelle Krebs, executive analyst for Detroit-based Cox Automotive. “I thought it would go away at some point when new batteries came on and they went to more body styles, but it struck me as rather abrupt.”
A company spokesman said the timing of the announcement coincided with GM’s need to notify suppliers about the end of production and about progress associated with the $4 billion the company is spending to retool the Bolt plant in Orion Township, Michigan, for the GMC Sierra and Chevrolet Silverado electric pickup trucks.
GM has said retooling saves time and capital, and it’s also allowed the company the flexibility to partially convert plants and build different gas-powered models in tandem. But in the case of the Orion plant, which solely manufactures the Bolt, it didn’t make sense to take that tack, because GM believes it needs the additional capacity. Plus, the Bolt doesn’t contribute to the company’s bottom line like plants that produce money-making gas-powered vehicles.
Barra on Tuesday said once the Orion plant reopens next year, the company will have a total production capacity of 600,000 EV pickups annually, including a Detroit plant that’s been slow to ramp up production of the GMC Hummer EVs.
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