One of the biggest driving factors behind GM’s corporate restructuring, which it first announced in late 2018, was profit. By closing down its U.S. plants and focusing more on profit-heavy vehicles like full-size trucks and SUVs, the automaker hoped to get rid of any vehicles that weren’t generating strong margins.
At the same time, though, GM is diving headfirst into electric vehicles, which aren’t known for having strong margins. High lithium-ion battery costs have made it hard for some automakers to turn a large profit on EVs and battery resource bottlenecks have been known to cause production delays, also affecting a company’s ability to make money on them.
Tesla Model 3
This won’t be the case with GM’s new series of electric vehicles to be built at its Detroit-Hamtramck Assembly plant, though. Speaking to CleanTechnica, GM president Mark Reuss said the automaker’s new EVs will be profitable from day one – just like a regular internal combustion engine car would be.
This is a big declaration from Reuss, as even Porsche has had trouble making money with its new Taycan EV. The German manufacturer previously said the Taycan line would not be profitable until 2023, which is part of the reason it launched the Taycan Turbo early in the model’s lifecycle. Expensive, range-topping models like the Taycan Turbo almost always have stronger margins than entry-level or mid-range models, so it makes sense to launch such variants first if the car has poor margins. This is also the same reason why Tesla delayed the launch of the cheapest version of its Model 3 sedan.
Mark Reuss presents the Chevrolet Bolt EV in 2017
The first GM EV to roll off the production line Detroit-Hamtramck will be the automaker’s upcoming battery-electric pickup truck, which will debut in late 2021 before going on sale in early 2022. The Cruise Origin autonomous shuttle will also enter production there, likely in 2022, while the rumored electric Cadillac Escalade is also expected to be built there.
GM is expected to release some new details on its electric pickup truck this weekend in a commercial that will air during TV coverage of Super Bowl LIV.
Subscribe to GM Authority for more GM electric vehicle news, Chevrolet Bolt EV news and ongoing GM news coverage.
Source: CleanTechnica
Comments
Not including R&D of course lol. True ROI would need sales with figures that rival full-size trucks
The ROI would be on the EV power train only as the rest of the trucks cost would be amortized, no?
I was speaking more toward their line of EV models as a whole, not just the EV truck.
As for the EV truck, depends if it shares platform and equipment with a standard combustion engine truck. Sounds like it will be on a ‘skateboard’ chassis and likely have it’s own body and interior sharing little in common with a conventional Silverado 1500
That EV powertrain cost a pretty penny to develop. I think Ruess was referring to materials, production, and distribution will be profitabile.
Agreed… The cost of equipment, design, and development could be spread over many vehicles over a period of time they decide.
I hope Mary Bara designs it – she has such a thing with sweaters and style.
WTF, That’s wats wrong with Mark and others in his group of peers.
Immediately profitable, WHAT, nothing in the world is immediately profitable.
OK some things are, say you are a X maker, so you have made X for 100 years, if you change the color of x to a color that costs exactly the same, sure the new X is immediately profitable !
So its my understanding that the EV truck ” platform ” will be different from the Cadillac – Cruise ” platform, so even if that is true, that investment in making those needs to be paid for ! Then there is the batteries.
Like the CEO’s of Boeing, Wells Fargo, GE, and others have learned !!!!!
Maybe GM could just tell the people the truth for once !
Maybe Mark and Mary could come out and tell the customers and investors the truth in EVs and Truck interior screw up, The Cadillac $hit that has been released in the last two years, the horrible customer support !!
Look at all the vehicles GM killed do to little to no profit ( at least that’s what we were told ). How can these new EV vehicles make more profit than those vehicles GM has made for years, sold in the same numbers ?
If these new EV’s are sold in then same numbers as the Impala, Cruze, CT6, How can GM say ” we can keep these and not those ” ?
Even the C8 numbers?
Nope not GM, They still think they are ahead or equal with the rest of the competition.
It’s called EGO !!
He’s just saying the cost of goods sold is less than the cost to make the vehicle (i.e. profitable). Design, development and equipment cost could be spread across multiple vehicles and even generations depending on the equipment.
I know what he means.
Did he say that ?
Also, look at the vehicles GM quit making do to volume !!
We were told this was do to the focus on the higher profit vehicles – right !!
So I would like the brilliant GM top to say, how many EV vehicles will they need to sell in a year before they are cancelled ?
How many Bolts are sold ? in relationship to Impala, or Cruze, or CT6 with the Blackwing, or even the Corvette.
And that very vehicle is also in question here, how many C8’s do they need to sell, per year, to keep that more profitable than the others they have killed !
Can anyone here explain the logic behind these decisions ?
Or is there an ego factor here and they think there vehicles will be more sought-after than they are now !
I mean in relation to the competitors, does GM think somehow the status quo is going to change ?
The difference is the C8 is a one off vehicle. The Bolt didn’t have to sell 100k/yr if the purpose was to test the 200hp copper rod motor, new cooling plate and cell packing, etc… I guarantee you’re going to see the same type of design in future GM EVs.
In a couple of years we will see that the emperor has no clothes.
well, tesla had their quarterly report. they reported a profit and their operating margins are over 20%. just for comparison, toyota’s operating margin is something like 9% and i think toyota has the highest margin of any mainstream auto manufacturer.
my guess is tesla’s numbers are high due to software upgrades people are buying. anyway, wall street seems to like it. stock is way up. at this price, each share at $600 gets you $8 of yearly profit. that is pretty lofty.
That is great news. I am so hopeful GM steps out of their comfort zone and offers truly amazing EV’s.
The Norm is not good enough anymore.
Mark Reuss appears to have suffered some type of rain injury because Chevy has difficulty making a profit with anything that had to do with hybrids (like the Chevy Volt and Cadillac ELR) and EVs like the Chevy Bolt; thus GM has to have made a major breakthrough, it’s difficult to imagine GM making a profit off their new Hummer EV especially if it is competitively priced like a Colorado.
With all the heavy investing in EV from pretty much every automaker at the moment, one has to wonder about the ability to obtain raw materials to make millions of lithium ion batteries for all these cars and trucks??
What happens if there is a severe shortage of raw materials? The automakers haven’t been asked this very question. For GM to completely abandon ICE vehicles would be foolish. But it seems to be the case for them as I don’t think they will be focusing too much on future ICE technology or improvements for that much longer.
Point being that there’s still a severe lack of infrastructure for electric charging stations across the U.S.. One has to imagine that in the big cities throughout the country especially in states like CA where utility costs are astronomically high in the major metros, I’m curious to know what the savings will be to the consumers and how will that affect gas prices since you know there will be a major push back from oil companies to not want EV charging station next to fuel pumps.
I’m still skeptical on this whole EV trend because I really can’t see them being affordable to average Joe and his family. Unless you own a home with solar power, owning an EV is impractical especially If you live in apartments or condos, then forget it.
The raw materials that make up a battery aren’t necessarily rare, some like cobalt come from places like the Congo are sourced in bad ways – child labor and/or human rights abuses. Most manufacturers are trying to reduce the amount of cobalt or remove it completely from their formula. Removing cobalt also reduces cost since it’s one of the most expensive components of the battery.
Gas prices in California are one of the reasons EVs sell well there along with charging infrastructure and mild climates. For EVs to become more popular throughout the country manufactures will have to look at insulated batteries to help with cold weather, along with heat pumps. Charging an EV is much cheaper than filling up a gas vehicle. If you drive 30 miles to work each day most long range EVs would only need to be charged weekly. Also EVs are much more efficient in traffic because they use almost no power when stopped outside of climate control and accessories.
Infrastructure will continue to grow as adoption increases. One thing that makes charging infrastructure planning difficult is 90% of EV charging is done at home. So the bigger problem is how do you get charging to apartment dwellers and people who only have street parking?
How come when they make a EV it looks like crap and expect to sell it . I don’t think Mary or Mark drives a Bolt to work or ever drove a Volt. In time I believe the volt would have been a big seller if they would have made more improvements on it as in moving the battery like Tesla’s in the floor giving it more room inside and longer battery life. They did not do anything to improve this unit so we did not buy another one. I’am Thinking on purchasing a Ford EV truck for my next vehicle. looks like Ford is trying to keep there customers happy with there light and heavy duty trucks. I read where Ford is coming out with a hybrid truck along with there EV truck where u can run power tools from the unit while on the job site 110 or 220 volts a must for a contractor. When I say hybrid its like the Chevy Volt.
“hybrid truck along with there EV truck where u can run power tools from the unit while on the job site”
You mean like this?
https://youtu.be/SjZY3UiIVr4?t=128
Of coarse he meant to say 120V/20A.
I hope that profit will be there on all vehicles they produce!
But when are these new EV models going to be available????
I was expecting something besides the Bolt to be available before my lease is up in January, 2021.
Yup. Me too.
I think it’s pointless to get an electric unless it has a 300 mile range and can be charged at any gas station within 10 minutes.
Until then I will happily drive my internal combustion cars.
I respectfully disagree. I have been driving electric since 2012. A 2012 Volt and a 2017 Bolt.
Once you drive with an electric propulsion system, you never want to go back to an ICE based vehicle.
In my Volt, I would use about 1 gallon of gas per week. The rest was totally electric, and I charged up in my garage at night.
With the Bolt, the 250 miles of range is more than enough for 99.5% of my driving. And again, I charge up in the garage at night. It is much more convenient that going to a gas station.
If you regularly drive over 250 miles per day, then you are right, you should stick to what works for you.
But if you only take a long trip once or twice per year, you can use the available high power charging stations, or if that is inconvenient, you can rent a car for a few days.
I need a truck to haul things a few times per year. So I go and rent at Home Depot. Why drive a truck the other 362 days per year????
JMHO
From a recent Car & Driver review of the CT5… this could be why he EV’s will be immediately profitable: Hint: crappy interiors..
The bigger issue is that the CT5’s cabin just doesn’t look or feel all that nice. Equipped with $1500 two-tone beige-and-black leather upholstery and the Sport trim’s tacky carbon-fiber trim, the CT5’s interior is an overwhelming mix of too many colors, shapes, and textures. We’d prefer a simpler, more consistent approach even if it meant a slight sacrifice in material quality. Real leather and metal trim pieces can only do so much if they’re combined with hard, cheap-looking plastic bits with obvious cut lines from their molding process.
These interior-quality issues would be more excusable closer to the CT5’s low $37,890 base price, which undercuts the starting prices of its German rivals by several thousand dollars. But the base model is so sparsely equipped that you’ll have to pony up extra to get equipment such as heated seats, adaptive cruise control, or leather upholstery. Our car had several option packages and stickered for $54,590. That’s within the realm of what’s reasonable for a car in this segment—we’ve had four-cylinder 3-series test cars pushing nearly $60K—but we wouldn’t want to pay that much for the Cadillac considering its duller road manners and comparably drab environs.
Other than its more spacious rear seat and improved infotainment controls, Cadillac’s CT5 neither remedies enough of our qualms with the outgoing CTS nor boasts the sharp driving dynamics that made those flaws easier to stomach in the first place. Maybe the CT5-V and its upcoming V-8–powered variant will embody more of the driver-machine connection that we’ve come to expect in modern Cadillac sedans, but the regular CT5 feels like a step backwards
How about GM produces some small cars that are ICE or Hybrids and make them good, I don’t want an all electric car as I live in an area with 6 months of winter.
I agree, the Volt had it all except longer battery life and where the battery was placed.
And affordable too!
C8 happened because testosterone exists at GM.
Not because of CEO MB.
CT4 and CT5 will fail miserably.
Check out the article in today’s Car and Driver on the CT5.
I call BS on Reuss
The CEO from VW finally admitted publicly that Tesla is much further along than any Legacy Auto Maker is right now.
He did say however that because the New Cars going forward will be mostly software, it will be easier to catch up.
I think all these Big Auto Makers are starting to realize they can make money and lots of it from Software.
The Future will be so cool to watch unfold.
Not sure what Mary Barra and Mark Ruess are thinking. They gave up on a billion dollar investment in the Volt and now have the second worse fleet fuel economy rating among auto companies (FCA is the worse). Tesla is kicking @ss in EVs and the Bolt hasn’t been updated in years. Now that Tesla is coming out with a EV pickup GM FINALLY decided to do the same. They have given up their early lead in EV technology. Musk is promising the Cybertruck will be priced in the 50K range to start. GM will NEVER match this. My guess these will be going north of 75k and will sit on the lot. Need to AT LEAST come up with some fuel efficient vehicles to remain competitive. Ridiculous. Lifelong GM owner but will most likely be looking elsewhere for my next purchase. Not interested in a Truck or a SUV that get 24 mpg.
I am with you. My wife loves her Sonic, but what after that? The Trailblazer is getting bigger and the Spark is that much too small. The wife hints at a Nissan. I sure hope GM can come up with something in the next 3 years…