GM can get stuck with Bolt, even if it makes sense to dump it

news7g12/13/2021

5 3 minutes read

GM can get stuck with Bolt, even if it makes sense to dump it

GM, which is spending tens of billions of dollars to switch its product line to electric vehicles in the coming decades, has essentially stopped making Bolts and Bolt EUVs, as they need every battery available for repair. 140,000 Bolts that they sold.

Fortunately for GM, the company is bringing its battery supplier, LG, paid $1.9 billion for the recall. But that cannot repair the damage to GM’s electric vehicle reputation.

“With GM looking for a future all EVIt’s not the best start, said Michelle Krebs, senior analyst at Cox Automotive.

Bolt production stoppage due to rival GM Ford (F) is tripling by itself Output of electric Mustang Mach E to meet strong demand.

GM has several other electric vehicles expected to hit U.S. dealerships next year, including GMC Hummer EV pickup, which is expected to begin production later this month, and Cadillac Lyriq, is scheduled to begin production in the first quarter of 2022. An electric version of its best-selling Silverado pickup truck, is set to be available late next year.

Those new cars – and all future GM EVs – feature a different battery than the Bolt, dubbed Ultium, which promises outstanding performance. But that would make it harder for GM to sell Bolts with bad batteries, even if the fire problem was fixed.

And the tiny Bolt – even the slightly larger Bolt EUV is 170 inches long, which while a few inches longer than the original, is about 1m shorter than the compact Toyota Corolla, even if it has interior space. Slightly larger interior and cargo capacity because it lacks an engine.

“It feels like the Bolt is part of an electric vehicle category that is being phased out,” said Jessica Caldwell, analyst at Edmunds. “It’s a big difference from what we’re going to see over the next few years.”

To complicate matters further, a Cox Automotive survey found that 69% of people considering an electric vehicle don’t even know that GM offers an EV.

Reasons to keep Bolt

There’s a reason GM stuck with the Bolt, which starts at around $31,000: it’s the only mass-market EV GM will have for at least the next few years.

Its next generation of EVs, due out in late 2022, are aimed at a more affluent demographic. Hummer EVs start at $80,000 to $110,000, while the Lyriq starts at $59,000. Pricing for the Silverado EV hasn’t been announced yet, but it’ll probably be in the range.

It gives GM a lower-priced EV to go with the higher-priced models it will soon sell, especially against rivals like Ford (F), Volkswagen (VLKAF) and Tesla (TSLA) offers electric vehicles with prices starting at less than $45,000.

GM's Chevy Bolt Recall Comes With A Big Price

GM (GM) Officials insist that Bolt is not going anywhere anytime soon. They claim it had more than 90% customer satisfaction earlier this year – albeit before the recall. Since then, GM had to buy back some bolts from customers who are concerned that their vehicle will catch on fire and who do not have a safe place to park.

Bolt also has “conquest rate“of any Chevrolet vehicle, with about 70% of Bolt buyers switching to GM from other automakers. And GM recently bolt redesign, introduced the slightly larger Bolt EUV, indicating that it plans to keep the car in its lineup for five years or more.

But the company is probably losing money on every Bolt it sells. If the Biden administration of Build back better If the law is passed, GM EV buyers will be eligible for a federal tax credit for purchasing most other automakers’ plug-in offerings. GM and Tesla Buyers lose that tax credit in 2019 when the two automakers became the first automakers with more than 200,000 plug-in vehicle sales in the US. People who buy electric vehicles from other automakers who haven’t sold a lot of them are still eligible for the tax deduction. If a GM buyer can get the tax credit back, that could allow GM increase the price of bolts.

For now, New Bolt sales are stagnating as 1,000 factory workers at GM’s Orion, Michigan plant where it was built are pending recall following layoffs. GM couldn’t build its other EVs, or any of the gas-powered cars in its lineup for that matter, at that plant without substantial retooling and investment.

So no matter how damaged the Bolt is in the eyes of EV buyers, GM will almost certainly start production again.

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