1 | During its earnings call, General Motors announced it will stop production of the Chevrolet Bolt EV and EUV by the end of the year. The automaker said it will focus instead on manufacturing the Silverado EV truck, which GM plans to begin delivering to fleet customers in Q2; the Blazer EV SUV, expected this summer; and the Equinox EV SUV, scheduled to launch in the fall. Earlier this month, GM became the second-best seller of electric vehicles in the U.S. with 20,670 EVs in Q1, ahead of Ford's 10,866 units (Tesla delivered ~170,000 vehicles in the U.S. in Q1). Bolt EV sales comprised 95.3% of all electric sales for GM, which leads to questions about the shift in strategy. The Bolt's success shows Chevy made strides in selling this EV, but the model's end ultimately underscores a wider macro trend toward cutting production costs in the auto industry. 
Chevy Bolt EV sales had also been gaining traction with business fleets, including the order for 800 vehicles by Domino's in November. The Bolt EV was also among the vehicle models to be included in the Hertz order of 175,000 EVs over five years from GM. However, the decision to halt the Bolt EV is consistent with the slowdown in production of the GMC Hummer EV, delivering just two units in Q1, to prioritize the Silverado EV and its Ultium battery cells. The automaker had also previously announced a $7B refactoring of its Orion plant in Michigan to produce the Silverado EV and the electric GMC Sierra. GM hopes to improve issues involving Chevy Bolt batteries, including its winter range loss — which has been overlooked in favor of tackling its obviously more urgent fire risk issues.

The Bolt EV originally had a 65 kWh lithium-ion battery pack manufactured by LG, which experienced fire risk issues believed to be caused when a torn anode and a folded separator are present within the same pouch cell. This led to a nine-month production pause and the safety recall of 142,000 units (which included vehicles dating back to its launch in 2017). The company's pricing strategy to reduce the sticker price by $6,000 enabled the automaker to surpass pre-recall sales levels; yet, it ultimately came down to the cost of production as Ultium batteries were down to $100 per kWh versus the Chevy Bolt batteries, which were estimated above $246 per kWh (based on replacement price). Thus, the strategy for GM seems to be focused on producing larger EVs (which means higher sticker prices) as the cost of production has decreased, aiming at widening margins, which decreased from 8.2% in Q1 2022 to 6% in Q1 2023. The Silverado EV will enter a competitive market, including the Ford F-150 Lightning (which sold 4,291 units in Q1) and the upcoming Tesla Cybertruck (expected in H2). To maintain its revenue ($39.98B in Q1), GM would be highly dependent on the Silverado EV carrying its sales, which would not be an issue at a 33% higher pricing versus the Bolt EV if it manages to scale production on time. |