As the budding electric vehicle market continues its gradual but exponential growth, profitability remains on the minds of automakers, as EVs need to be relatively affordable if the masses are to make the transition to an electrified future. Now, General Motors CEO and Chair Mary Barra has gone on record as saying that lower-priced electric vehicles are not profitable yet.
During the recent 39th Annual Bernstein Strategic Decisions Conference, Barra was questioned about EV profitability and cost parity between EVs and ICE vehicles. In response, she stated that, “battery costs are still not at a point where you can get to the mass market, which is this $30,000 to $40,000 vehicle, that’s what the bulk of new car sales are, frankly, around the globe, that C segment kind of crossover SUV.”
Essentially, Barra is claiming that turning a profit on an EV that costs $30,000 is difficult at best. For reference, the upcoming 2024 Chevy Equinox EV – which is currently scheduled to go into production later this year – will boast a starting price somewhere in the $30,000 ballpark.
With that in mind, the starting MSRP is subject to change any point in time. However, we expect that the average transaction price (ATP) of the Equinox EV will cross the $40,000 mark, as ATP figures are always much higher than any given vehicle’s base price.
Notably, Barra pointed to GM’s efforts on bringing battery costs down as a reason to hope for affordable EVs. In fact, despite the average price of automotive batteries rising, General Motors is expected to reduce battery costs down to roughly $87 per kWh by calendar year 2025.
“…you look at a lot of the teardown information,” General Motors CEO and Chair Mary Barra as quoted as saying. “We know we can get better. We’re already seeing it, and we’re dedicating the resources to take the cost out. So I do think that, that line crosses some part in the latter part of the decade maybe a little bit longer, but we have teams working on it and taking all the knowledge we had from internal combustion engine because there’s a lot of commonality to get those costs down.”
Barra also mentioned that the cost parity between EV and ICE vehicles likely won’t equalize until later this decade, or potentially even later.
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Comments
Duh?!
Need more help from the government?
So the price range most people should be in, we just can’t do with this EV push? What a bunch of garbage.
Well…
You can get a Brand new Tesla Model 3 for $32,000 right now…
With leather… Power everything… insane 14 speaker stereo… full glass roof…
Heated rear seats and steering wheel… pretty much everything you want…
Not profitable to the consumer either when they don’t go far and there will be a battery replacement cost equal to a new car. Once the liberals leave office and the government quits paying for everything liberals think are great ev consumers will dry up.
And how much profit is in an ICE car under 30k ?? With the chip shortage look at what GM thought was expendable. Virtually everything below a full size truck or SUV.
I read not long ago that 80% of Fords profit is F series, and they are even thinking of getting out of the compact SUV market( Escape) because they cannot compete and make money.
GM would be similar as to where their profit is generated.
So if you want to talk EVs in the 30-040k not profitable , lets take a look at ICE products and you will find its not much different .
For small ice vehicles, many GM models are made in south Korea where labour is much less than the US and it will allow GM to make a few dollar on those vehicles. If they were made in the US, likely the vehicles would be sold at a loss.
Equinox production left Cammi in Ontario which made some of the highest quality GM vehicles and they moved it to Mexico , cheaper labour
Look at what GM now produces in NA , Full size truck, and SUVs , electric vehicles , Corvette, and larger crossovers , Traverse , Enclave etc ,These are all high priced vehicles with bigger profit margins and much easier to absorb the higher labour costs
Most electric for GM is North American made and it attracts the higher labour costs , which is a huge component in the cost of a vehicle. What if GM made their electrics in south Korea , how would that affect the profitability?
So when we react to no profit in the lower price EVs, lets also note it very similar for ICE powered cars .
4-6K per unit in the case of the Malibu. 750-1K of that is dealership. Remember GM cut sedans like the sonic and spark that were 15-20K cars not 30, and the Impala that was moving only several thousand units a month. In the case of the impala, yes they were loosing money.
Because of Roe you can guarantee Dem victory in 2024. Trump will be in hair and Desantis anti gay stuff polls bv badly. Trump was smart to never talk about that issue but De-Sanctimonious fell into the culture war trap
@Dave have you checked the cost of your 9 speed transmission or a new engine. What you should be questioning is will a battery last as long as either one of them. I bet yes as the tech progresses JUST LIKE EVERYTHING else you touch. But ya stay on oil and as those refineries have less and less demand you can pay to keep them all open though I believe they will never go away and have better suited use of other transportation of things and not simply one who chooses to drive their oversized 2500 or 1500 or or with one person in it because it makes them look and/or feel good. Throw away that cell and stay on landlines. Or keep the 5k brick first cell phone. Give it time.
and so, the scam continues…
The 1975 Corvette is GM’s greatest Scam ever…
Just sayin…
lol…that’s why I stuck a 400hp small block in mine,,
Let the market take care of it self. Price the EV at a price where they are profitable to the manufacturer, Lets say an Equinox, price it at $45,000 if that is a profitable margin. Now we the consumers have a choice, we can buy an ICE new automobile at the best price that we can find, or, if a purchaser wants to pay the price because they wants an electric automobile, then they can pay the price and buy electric, its their choice. Plain and simple. Me personally, I am about three years away from the thought of going electric. But to each’s own. that’s the way I see it.
Dwight , yes that would be the legit way to do business. unfortunately, they can’t push the agenda using that market strategy.
Do you have to pay Mary 30 million a year to state the obvious?
I’m still waiting for the 20 EVs by 2023 that she promised in 2017.
Wait wait wait, 40K for a C class EV isn’t profitable? What is the break even benchmark for these trucks/SUV’s? 60-70k?
I predict the moment the administration changes, the EV projects will go. That’s abominable financially. Bods well for both GM and Ram, GM who has enough cash on hand and a new small block on the way and Ram who’s just running out the clock. Ford/Toyota are both in finicky positions however.
The US sources the majority of its lithium from the CCP. Xi Jinping appreciates your obedience.
100K Hummers aren’t profitable either.
very large battery plant to be built in Oklahoma. with batterys to be available by 2025