General Motors (GM) recently announced a delay in the production of its upcoming slate of electric vehicles (EVs), including the Chevy Equinox EV, Chevy Silverado EV, and GMC Sierra Denali EV. This decision comes as the electric vehicle market experiences a softening in demand and dropping prices, despite continued year-over-year sales growth.
According to GM CEO Mary Barra, the delay of “just a few months” is aimed at protecting pricing and enhancing the viability of these electric trucks in the future. The adjustments made during this delay will render the trucks more efficient and less expensive to produce, ultimately increasing their profitability.
Furthermore, GM is revising its near-term targets for EV sales due to slower-than-expected demand growth. The company originally planned on selling 400,000 EVs in North America between 2022 and mid-2024, with a production goal of 100,000 EVs by the end of 2023. However, GM still intends to produce 1 million EVs by 2025.
During a conference call with investors, Barra acknowledged the uncertainties surrounding the automotive industry and the transition to EVs, stating that there will inevitably be ups and downs along the way.
Despite these production delays, GM exceeded Wall Street’s expectations in its third-quarter earnings. The company reported $44.13 billion in revenue, surpassing the estimated $43.68 billion. This positive performance comes amidst ongoing negotiations between GM and the United Auto Workers to end a six-week strike that has been costing the company approximately $200 million per week in lost vehicle production.
The delay in production affects not only the Chevy Equinox and Silverado EVs but also the premium GMC Sierra Denali EV pickup truck. It is worth noting that GM has set a goal of transitioning solely to electric vehicles in the US after 2035. Paul Jacobson, GM’s chief financial officer, described the upcoming transition to EVs as “choppy” and acknowledged that internal combustion engine vehicles will play a role in the company’s portfolio during the next decade.
This is not the first time GM has faced challenges with its EV production. The company previously experienced a slower-than-expected ramp-up for its new Ultium-powered electric vehicles, including the GMC Hummer EV and Cadillac Lyriq. Issues with the battery supply chain forced GM to reduce some of its production targets. Additionally, GM recently announced a delay in EV truck production at its Orion facility, originally planned for next year, until late 2025.
Overall, GM’s decision to delay production of its upcoming EV lineup reflects the current market conditions and the company’s commitment to ensuring competitive pricing and long-term viability. Despite these setbacks, GM remains optimistic about its transition to electric vehicles and aims to be a leader in the EV market with its goal of producing 1 million EVs by 2025.
