The automotive industry is shifting strategies when it comes to electrification, with slower-than-expected growth in EV demand and a changing regulatory environment influencing all of the major makes. That includes General Motors, which has announced several changes to its EV strategy in the last six months. Now, The General is shifting its strategy again as the automaker delays expanded production of the Chevy Silverado EV and GMC Sierra EV.
During GM’s recent earnings call, GM CEO Mary Barra confirmed that the automaker now expects slower growth in the EV segment than was originally projected.
“Over the next few years, third-party forecasters now see the EV market grow steadily but more slowly than it did over the last few years. As a result, we are adjusting our spending plans to make sure we’re capital efficient and moving in lockstep with customers,” GM CEO Barra said during the call.
The GM CEO also addressed plans for the GM Orion Assembly facility, which is now set to reopen as a battery electric truck plant in mid-2026, half a year later than was originally anticipated.
“We’re confident that we can meet customer demand for standout EV trucks in the interim by leveraging the production capability and flexibility we have in Factory Zero,” Barra said. “We will also continue to take advantage of the flexibility we have to mix production between ICE and EV at key plants.”
Essentially, GM is moving forward with the launch of the GMC Sierra EV and expanding the model range of the Chevy Silverado EV. However, production figures will be lower in the interim than originally planned as new units roll off the line exclusively at the Factory Zero plant in Michigan, which also builds both variants of the GMC Hummer EV.
Of course, this isn’t GM’s first strategy shift. Back in January, GM announced it would reintroduce plug-in hybrid electric vehicles to the North American market to bridge the gap to full electric. Originally, GM was expected to leapfrog hybrids entirely and move straight into all-electric powertrains. Additionally, Cadillac announced in May that it was reversing course on its ambitions to become an all-electric brand by 2030, instead offering customers the “luxury of choice” with regard to ICE and all-electric powertrains.
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Comments
Total and complete incompetence. Nice PR speak however. How many more times are they going to kick the can down the road before admitting they have no idea of what they’re doing? Hubris 101. Hopefully they’ll wake up and put another vehicle in this plant like Ford did with Oakville.
They fell victim to the hype. (“It’s the range! 400 miles will sell! It’s the price! $50,000 is the perfect number! No wait, $40,000! You’re losing to Tesla, hurry up and you’ll recapture the market! Production numbers are too low! Raise production and EVs will fly off the shelves! Build modern batteries and everyone will buy! You’re so close!”)
With days supply of inventory increasing every month, GM needs to starting some temporary two week shutdowns at certain plants to reduce inventory. As for Orion, I would expect further announcements in the future regarding production delays. The market demand for that type of vehicle at that price point is not there, so it’s smart not to spend money tooling up any plant when demand is low.
It would be smarter to get rid of the idiots that keep making these bad decisions.
This article isn’t entirely accurate.
It says: “The GM Orion Assembly facility…. is now set to reopen as a battery electric truck plant in mid-2026, half a year later than was originally anticipated.”
The truth though is Orion was originally slated to reopen in 2024 and begin building EV pickups. That planned reopening was delayed till “late 2025” according to a GM announcement in October of 2023. Now the restart date is being further pushed out to mid 2026 so the restart delay isn’t half a year later, in total, it’s actually about two years later than originally planned.
Who knows if it will ever happen now. Factory Zero is a large facility with the ability to build 230,000 units. Currently it’s building the EV pickups and the Hummers. I suspect it’s severely underutilized currently as demand doesn’t appear to be matching projections for any of GM’s EVs. With the cancellation of the Cruise Origin, Factory Zero is losing that product and gaining its capacity. It will add the Escalade IQ but it should still have the ability to meet the demand for the EV trucks for now.
GM was originally planning to have Orion up and running now (mid-2024) building 400,000 EV pickups per year but apparently there isn’t nearly that much demand for those products currently.
I can almost guarantee right now gm is scrambling to find product to put in Orion of the ICE or hybrid variety like Ford did with Oakville. They already sunk $4 billion into Orion and it is not a good look for it to be sitting there collecting dust. The battery assembly facility there can be used to assemble batteries for other plants so that facility will not be a total waste.
For those who want gm to make an upgraded Malibu . The current Malibu is equivalent 2 generation old Camry .
Most Camry I see in Brooklyn are hybrid . And new generation had all wheel drive option .
To make Malibu competitive , big investment . Not sure what product could be built at Orion
More large pickups and SUVs
The EV issue is much more complex than just saying people aren’t ready to buy them or why don’t they offer hybrids or PHVs first? The fact is that companies like Ford, GM, Stellantis, who sell a lot of full-size trucks will have no choice but to produce and sell EV‘s if they wish to continue to sell those very profitable trucks. Regulations from the EPA & CARB on fuel efficiency and greenhouse gas emissions effectively require GM build and sell EVs to comply, and many state laws will ban the sale of ICE vehicles altogether within 11 years. The market for EVs, although growing faster than for ICE vehicles, shows a lack of enthusiasm for the number available today. The current government regime’s think they can mandate people into buying them, but that’s obviously not going to work. Even if there are changes in Washington the manufacturers have to plan for compliance with current regs years in advance. And the fine for noncomplying vehicles is steep, eventually $57,000 for each vehicle that exceeds GHG regs. I don’t think anybody’s gonna buy $120,000 gas powered Silverado do you??
It is important to put more conservatives in Congress.
Two of my friends who are lifelong people who lease vehicles just bought a vehicle from a reliable brand . They plan of driving it into the ground if a replacement ice vehicle is not available . People are just going to keep their older vehicle longer sinking vehicle sales .
The plan I heard recently is that the democrats plan on placing an environmental damage tax on fuel to push all those driving older ice vehicles to give them up .
Vote Republican, always
I think they don’t have capacity to builds them as they delayed it . They want to clearly but there’s not enough batteries to go around . They are late to the game in that sense . Pandemic isn’t a excuse
It’s a smart move by GM to delay the vehicle . There is no early mover advantage anymore. People are not 100% loyal to brands . Move production to North America and wait out for demand to catch up with supply . Would not be surprised if it does not come out for a few years .
People I know who own ev.
1) own a house
2) have solar panels on said house, some with batteries to back up .
3) all have family incomes way over national average .
Took advantage of subsidies for solar ($68 k – $55k in subsidies is what I heard . 4% loan )
Took advantage of tax incentives federal and state .
Lifetime cost (including trade in value at 5-10 years out ) of ev is way more then ice.
The one friends who does not own a house complains about high cost to charge and long wait to charge
In my part of Brooklyn , all the chargers are mobbed by Uber and Lyft drivers . If you don’t have a home charger , you are waiting and paying
Problem is how long are you going to wait for the demand to catch up while your assets are sitting collecting dust? Don’t forget GM also delayed their new battery plant in Lansing.
This description represents a small sliver of Americans, far from typical. Very few homes have solar setups where electricity is reasonably affordable (most of the country). There’s no compelling reason for me to buy an EV.
Part of the problem is that the infrastructure act Biden passed requires lots of us content that when gm made its plans it did not account for . China is floating in extra rare earth minerals and lithium while usa can’t open new mines because price of lithium too low . Lithium stocks are down by over 50% due to oversupply keeping us supply in the drawing Board stages .
The future is battery rental similar to Nio . Maybe not quick swappable but the battery can be replaced with newer battery after x many miles . You could have lower up front cost and a monthly payment but not face a large replacement cost down the road . Play with human physiology and make the long term cost of the battery more palatable
I have a perfectly functioning 3 year old iPhone that ticks me off that its battery life drains quickly . If near a plug I love it . Out all day I don’t . Not spending to replace battery . But if I paid $5 a month on a battery replacement warranty , I would get battery replaced and phone had lots of life left .
People look at ev battery range land compare it to their phone .
I really got annoyed with all the Barra bashing, but with such a huge misstep, wasting billions of dollars and years of research, efforts that could have been put elsewhere (not saying EV’s don’t need R&D but it didn’t need to be at the level they did). Just think of all the other things they canceled for this mistake. She should go.
Things cancelled/delayed:
– Jeep Wrangler/Ford Bronco competitor
-A new full size van
-Crossovers, coupes, and sedans built off the VSS-R platform
Yet the arrogance, myopia, and hubris of Barra and co. will not allow them to admit they made a mistake so they continue dropping money down a dark hole while the product lineup whitters.
Mmmmm, not enough EV demand? Who would have ever thought that?? LOL
Yep, global warming is sure to kill us all now.😄
Who is ever going to have to answer for all these blunders?
Botched BEV launches.
Software disasters
Cruise debacle
Making Batteries by hand because you couldn’t figure it out
Disastrous sales decline in China (Because you are clueless on BEV’s)
Recalls
Publicly stating multiple times you will overtake Tesla
Fake production numbers over and over again
Dumb Stock buybacks instead of inverting in proper EV’s in which you are trying to catch up
(And these are just on the EV side of the business….many more on ICE)
Is anyone gonna have to answer for any of these?
GM needs ALL New leadership that understands modern market dynamics and doesn’t try to push half baked vehicles in segments they must compete in.
The China issue is even Deeper . There are a half dozen new tv brands in China . All splitting the car market even further . gm future in China is its past . Sales will continue to crater and the communist government will just want local players. Cut out all the foreign companies
They took gm , ford, vw, Toyota expertise and. Now they don’t need you anymore
@James
I would completely agree with you if it was only GM but it is ALL Legacy Automakers that are Struggling in China. Are you saying that Porsche is undesirable and customers are choosing other Chinese made Flat Six engined vehicles? Lol
No, it is that they covet EV’s and the ones from Legacy simply do not stand a chance in that market.
Nothing is stopping Tesla in China so the theory that MSM is trying to use about Legacy getting shellacked in China simply doesn’t hold water.
The customer in China wants the latest and greatest and that is just NOT coming from Legacy in that market.
VW has like 50% of their earnings that come from China….Legacy is in Trouble.
The high end luxury brands like Porsche will always have a niche .
What I am saying is that local brands are not seen as sub par as they once were in China . GM will have shrinking sales year over year until the market becomes unprofitable or the Chinese government just dumps all the foreign partnerships . The Chinese don’t need our tech to build cars anymore .
One prominent Wall Street analyst said earlier this year that GM should pull out of China altogether . Any new money invested will not result in profits . That may be a little extreme
You’re right , on the ev front they can’t compete . Nio new mid price brand is bring out a Tesla model y competitor at 20% under Tesla cost .
@James
I see what you are saying. Agreed that most consumers have no idea how insanely good some of their vehicles truly are.
I do not think Legacy can leave China and all they can do to survive is literally make great EV’s that are coveted.
If not, Legacy will find itself having one market, the US for ICE and that will be disastrous because they will be splitting their R&D into two completely different Propulsion Systems that require completely different supply chains and more importantly different factories.
Chinese and so called startups will have an insanely high advantage simply spending money on EV’s and that is it.
Will become completely unsustainable real quick!!!
Do you have any proof of the fake production numbers assertion? I always thought the Hummer EV production numbers were faked but I never saw anyone prove it.
Automobile production numbers usually look something like this:
436
513
398
Hummer EV production numbers were like this:
75
150
200
They just looked made up and I honestly don’t believe anything GM says about EV demand. They’ve claimed Celestiq is “sold out” for two years at 400 units per year. They’ve claimed to have 90,000 reservations for the Hummer then they seemingly are selling very few actual products.
It certainly looks like numbers were faked and GM attempted to create an illusion of demand but I haven’t seem actual proof of that.
E V Enthusiam Vexed