Chevrolet Equinox EV and GM Electrified Pickups Delayed
Following news that production of the Chevrolet Silverado EV would be delayed, General Motors has announced that the Chevy Equinox EV would likewise be arriving behind schedule.
The postponement was announced as part of GM’s earnings report, with CEO Mary Barra citing improvements the company would like to make to the product as well as some market challenges. Some of that revolves around using the time to better manage capital investment related to EV demand (or lack thereof) while the rest seems to apply to engineering changes that might make the vehicles more profitable.
There was also some speculation about how the UAW strike may have impacted the situation, as Barra had already suggested the situation would eventually discourage investments. However, your author is disinclined to believe it played a significant role in this particular decision. However that does not preclude the automaker from blaming the strike later on, nor union action from impacting the company’s decisions in general.
“It’s clear that we’re dealing with a lot of near-term uncertainty,” Barra said in a conference call with investors Tuesday. “And then also ... the transition to EVs, that will have ups and downs.”
Conversely, the relevant earnings call does seem to have directly influenced the UAW to call for a walkout at GM's Arlington Assembly plant. The facility is responsible for manufacturing the Cadillac Escalade, Escalade ESV, Chevrolet Tahoe, Suburban, GMC Yukon, and Yukon XL.
GM reported a third-quarter 2023 revenue of $44.1 billion and net income attributable to stockholders of roughly $3.1 billion. Hours later, the UAW expanded its strike against the company.
"Another record quarter, another record year. As we've said for months: record profits equal record contracts," stated UAW President Shawn Fain. "It's time GM workers and the whole working class get their fair share."
While GM didn’t directly accuse the strike of having influenced its decision to postpone numerous EV production launches, it did note that it had endured an estimated $800 million in lost production and that was before the UAW had targeted its largest plant.
But the real issue likely stems from legacy manufacturers’ general inability to make EVs profitable. Demand seems to be plateauing on electrified models and their above-average price tags have not helped remedy this. However, Chevrolet had vowed that the Equinox EV would start at $30,000 and has remained pretty consistent in claiming that would remain the price throughout 2023.
But it remains to be seen whether or not that’ll remain true. Frankly, it’s gotten pretty rare to see an automaker adhere to the initial claims about EV pricing. Models frequently launch in top-trim formats, with entry-level models delayed indefinitely. Other times, the base model comes but with a noticeably higher MSRP than the manufacturer initially promised.
It’s my assumption that the now-delayed Equinox will see a similar fate. Though we’ll have to wait and see. The vehicle was supposed to arrive by the end of 2023 and will now be delayed by at least a couple of months. Barra likewise confirmed that the Chevrolet Silverado EV RST and GMC Sierra EV Denali would be coming later than expected to “ensure their success.”
The CEO stated that General Motors’ commitment to EVs was as strong as ever. But she also told investors that the company would be “moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make our vehicles less expensive to produce and more profitable.”
[Images: GM]
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A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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GM made a whopping 7% profit on their $44.1B in sales. I can earn 5.5% on a certificate of deposit.
GM should shut down the whole operation and its investors should buy stock in Apple.
It seems like the raison d'etre of corporations these days is to pay the C-suite's obscene salaries.