How Big Diesel Trucks Are Paying For GM’s Electric Future

FEB 8 2019 BY STEVEN LOVEDAY 84

In the real world of automaking, it takes some to make some.

GM just reiterated, once again, that it plans to go 100 percent electric in the future. It has been awhile since we’ve heard about GM’s all-electric efforts, and we were getting a bit concerned, as expected. Surely based on earlier announcements, we figured the Big Three automaker would have already released, or as much as unveiled its next battery-electric vehicle offerings.

But, nope, the situation has been stagnant ever since the automaker came forth with its future plans. We thought, perhaps due to the current administration, the loss of the federal EV tax credit, the potential for more relaxed emissions standards, and the discontinuation of the Chevy Volt, GM had reconsidered. However, CEO Mary Barra came forth recently to announce otherwise.

Depsite all of the above, as Bloomberg points out, the automaker’s future still revolves around its full-size pickup trucks: The Chevrolet Silverado and GMC Sierra. GM enjoys a significant profit margin via its current full-size pickup trucks, and a healthy part of that comes from those with diesel powertrains. This is not to mention GM’s success with its compact trucks: The Chevy Colorado and GMC Canyon, which both offer fuel-efficient turbodiesel variants.

Thus, while GM has pointed to a myriad of all-electric vehicles that should easily be arriving now or at least very soon, the timeline is pushed back. Nonetheless, despite the above reality, CEO Mary Barra stepped forward this week and said that the company’s all-electric efforts are real. However, she did say that GM will lose money on the venture, at least for a time. And, she was unwilling to provide a future timeline.

Perhaps this is because the automaker said it lost some $9,000 on every Chevrolet Bolt EV sold, at least early on. It’s clear the Bolt is not what consumers are looking for, despite its long range and crossover-like versatility. While an EV pickup truck could complicate matters even more — with considerably substantial capital losses — it seems that may be the real answer for GM.

We can only imagine how well a reasonably priced battery-electric pickup truck might do in the future. Even a highly capable, plug-in hybrid Silverado or Sierra could make huge waves if it arrives sooner rather than later. In the meantime, we need to be careful not to despise GM all too much for ramping up its current gas-powered and diesel lineups in a hopeful attempt to pay for the future.

Source: Bloomberg

Categories: Chevrolet, Trucks

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84 Comments on "How Big Diesel Trucks Are Paying For GM’s Electric Future"

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GM hasn’t earned the level of trust necessary just to take them at their word.

And for people like you, they never, ever will.

Yep, GM haters gonna hate regardless.

That’s a really telling statement given your anti-Tesla position in hundreds of posts.

Hahahahahahahahahahahahaha!!!

(hey pot, this is the kettle calling. Sure I’ll hold..)

pifff…….

Not true. I used to hate GM, especially after bailout. But when they made phenomenal SparkEV that’s still unmatched by any other, especially in charging, facts do change my mind.

Well, at least for GM EV, can’t say the same for rest of their crappy lineup. Only decent offering by GM is post subsidy Bolt on sale and that’s going away soon, so back to hating on them. Yes, facts do change my mind.

They had my trust at one point and lost it.

The problem for GM is that they have done enough BS enough times that there are a whole heck of a lot of people like Mr. Stroller.

And I’m not even talking about the BS stuff that GM wrongly gets hit with that is dumb. Like the fake “Gubbmint motors” bullpucky. Or when they do the right thing and recalls a limited number of battery packs because in manufacturing sh!t happens and sometimes need to be fixed.

I’m talking about stuff like their BS pricing on the ELR, and killing the Volt with no replacement, and their involvement with the lobbying group they belong to that is lobbying AGAINST nearly every green everything (except them losing the fed incentive).

They need their charter revoked

What charter is that?

I’m still trying to figure out what the headline: “…Paying For GM’s Electric Future” means. What electric future?

From what Barra says, GM doesn’t plan on making money from EVs anytime soon. Until then, I suspect GM will lay low on the EV front.

Anytime soon, being a 2-3 years. That’s pretty soon in automotive terms.

GM is having reliability problems with Silverado’s speed sensors which trigger ABS alarms and make the truck fail inspection in NY State. They’re also playing games with a 4-cyl turbo charged engine which only has good fuel economy if driven exactly like the EPA testing format dictates. So this is why so many people buy Rams, Toyota Trucks, and Ford F-150’s. Of course Ford isn’t super great on some reliability fronts so the fact that people are ditching Chevy’s for Fords tells you how crappy the Chevy’s are.

Toyota seems to be somewhat better than any of them (other than horrible gas mileage) such that their sales figures are gaining ground also.

I own 2 GM products but I freely admit I hate listening to GM’s ‘Brass’ Talk. To me they just showcase their cluelessness and one HOPES some under paid designers have more intelligence than these Verbose lucky few with the $million paychecks.

GM put a caviar battery, in a Sonic. They wont do it right, because people will buy it. They are no different, anymore.

Steven, it’s got to be tough all these years, all the cheering on. Jay started this place, largely on the Volt’s back. It makes less profit, than Bucky tooling around in an empty pick-up, multiplying his CO2 by 3X-5X. So, GM doubles down, pulls it, ‘Promotes’ Silverado twitter, low tech, and high roll centers, as somehow desirable to people who want no part of it.

The company has become a junky’s dealer, and writers are back to the benefit of the doubt and bread crumbs from the Plutocrats.

If you think that InsideEVs was looking heavily at the Volt, then you were not here or paying attention.
Volt has never sold that well.
Only for 2 years did the Volt outsell the leaf in America, and globally, the leaf has outsold the volt every year.
In addition, since 2014, the MS has also outsold the volt globally, and ~ the same in 2014, with MS outselling them in 2015.
In fact, the volt has never exceeded 30K / year, making it one of their worst vehicles.

Car sales are falling at all car makers. Few of them can compete against Tesla in America. Now, that Tesla is taking M3 to Europe and China, I doubt that they will compete there.
MY will start this year, and then an inexpensive, 25K starts in 2021. These will KILL any car makers ICE sales. The last thing these companies want to do is make it look like their ICE cars are not selling.

What a stupid comment. Vast majority of people aren’t that interested in an over priced vehicle that ruins on batteries.

Give the automakers a break. They can’t make electric vehicles until they can figure out a way to make a profit. We can’t afford to work for free and neither can the automakers. Electric vehicles are the future and the big three has to figure out how to make a profit making them. I hope they will, but if they can’t they will go under. If they do, others like Tesla will pick up the slack. The automakers don’t hate electric cars, they just have to figure out how to make a profit. It’s hard to turn a battleship.

They don’t make a profit. No just like Ford they are structurally bankrupt (per Forbes
) They can instead run at cost, they don’t need even their fake profit.

But the profit is such a joke. Ford last year gave away 10 billion of the dollars its employees generated to so-called ‘owners’ as dividends for non contribution while it told its employees they had to sacrifice for ‘owner’ profits. That could have gone to employee stock options or pay- not bs management pay- not what I had in mind.

Say some people go to a casino and bet on a stack of chips with Ford’s name on it. Ford then pays these non contributing carbon rent seekers on the basis of this lie by taking it out of hides of it employees and the quality of its products. Ford is like a money vending machine. Ford if I give you 5 dollars will you give me a dollar back plus my 5 back? Ford’s product isn’t vehicles its carbon rent seeker parasite enrichment. It can’t be parasite first and still compete.

Guess what? I have an idea on how a traditional automaker can make a profit on EVs. How about if they don’t sit on their posteriors and build more than a handful of EVs? Believe it or not, designing a car to sell 50K or less units practically guarantees that there will be no profit.

The problem isn’t lack of profit so much as it is lack of commitment. GM is not committed to selling reasonably priced, long range EVs. And don’t tell me the Bolt was a great effort. The Bolt was an economy car sold at an MSRP of $35,000. And, obviously, not many potential buyers appreciated the effort.

GM could have done better. They didn’t.

BS that the Bolt is an economy car.

So how do you explain the low sales in comparison to the demand for the Hyundai and Kia offerings? (Albeit I’m not impressed with the relative handful planned for the U.S.)

Kia and Hyundai only sold more due to the incentives offered in the European market.

If Bolt were offered there, it would have sold in similar amount. GM has pulled out completely out of the European market. It doesn’t even sell ICE cars there anymore.

So Tesla is not making a profit but have the last 2 quarters. It’s called economy of scale

No, it’s really not. It is called perceived value. Tesla can make a lot of profit on each car, not because they make a bunch of them and get a slight price break, they make the profit because they can convince the buyer to pay way, way more than it costs them to build it due to features, or style, or image, or whatever. Companies like Apple, Nike and Rolex have used this strategy for decades.

Economy of scale buys you a discount. Adding consumer value, real or imagined, gets you serious profit.

I perceived acceleration tonight.

Looks to me the management has no vision and no pressure. VW got pressure, Jaguar has vision, Volvo has vision, Toyota lacks vision, MB got some pressure, BMW has a bit of pressure and vision. Just to name a few. Seems GM are likely going to be screwed in the future, since as VW can tell it takes a while until the machine is running. You don’t transform overnight. And the electric truck machine will likely run without GM.

GM had a vision. It turned out that it was the wrong vision and it has likely soured them on the whole BEV scheme. Likely all the follow ons to the Bolt have been shelved, or scrapped based on the Bolt’s sales performance. It will now take them time to get their Cadillac BEV up to speed and even then, how do they know they don’t get burned again?

I’m sure in China they will roll out all sorts of new EV product right on time because they have to and there the consumers like GM products. In North America… it’s a tricky bit of business. Jaguar, Audi and MB have all taken a stab at Tesla and I think the results are underwhelming. No doubt GM is watching and learning.

GM should forget about Tesla and go straight after Rivian. That’s a market space more welcoming to them than the luxury sedan market is.

Lack of sales performance? They can sell pretty much everyone they can build and they are uppping production. They are battery constrained.

But bro1999 claimed over and over and over that GM could build 50K Bolts per year without hitting battery constraints.

You can’t claim battery constraints when GM actually sold MORE EV’s in previous years.

The Bolt is not battery constrained at 18k sales, especially when it sold 23k in 2017. It is lack of sales performance.

Davo8 why you in the site? All you do is moan and bish about EVs and troll

Either slow down your thumbs, or proof read your posts. Two sentences and that was too much for you. Go back and edit.

No, he’s right. You’ve changed. It’s as if it were impossible to believe people could want something a market won’t deliver. Like you deny market control, or “bargaining power of suppliers” exists. We don’t have to go down the road of negative marketing and lobbies, to see this behavior. Do we?

I don’t struggle with corporate mission statements, and the idea we don’t see lots of products merely because they are less profitable, not losers. GM is in the weaker CAFE class, and telling US ~5mn car demand to hit the road. Blame regs, or the almighty dollar, not the idea demand doesn’t exist.

The Bolt is butt ugly. Painful seats. Dollar store interior.

GM can style a car. GM usually makes great seats. GM usually have plush interiors.

They didn’t want it to sell.

The best selling EV globally – the Leaf – is worse in nearly every regard. I doubt you would say that Nissan didn’t want the Leaf to sell.

>>Toyota lacks vision

Reality is, Toyota sees something different. They are looking at the mass market, trying to find a way to affordably fulfill the wants & needs of their 10 million customers per year. In other words, you are looking at something different… which is quite common from the eyes of an enthusiast.

Appealing to a Corolla or RAV4 shopper is very challenging. They won’t be forgiving like early-adopters and they won’t be as willing to pay as much to get a plug. There won’t be any tax-credits available for them either.

In other words, know your audience. An electric future for those of us here is a reality already. For the masses, it’s still a number of years off.

No, you’re totally wrong. In two years no one will be buying ICE cars, instead they’ll be buying $50k EV’s and using the $1000 a year fuel saving to pay the $30k up front uplift on the car they just bought… /s

That appears to be the viewpoint of a lot of enthusiasts on this website. The real world is much more like you say. Cost is still the biggest issue in all this. Manufacturers want to make a vehicle that appeals to their price point, and at the very least not make huge losses on them by selling at a steep discount. For someone like Toyota that’s primarily the $20-30k range, not the $50-80k range of the more successful EV’s (Teslas).

Andy that so false. Banks are not going to finance $50k car if can only afford a $25k car

Subprime car loans are all the rage. Half or more of the people driving huge SUVs and Trucks can’t really afford them but get 6-7 year loans.

How many Tesla buyers are in this group too I wonder?

They why haven’t they been selling a line of EV Lexus cars and SUV’s? Have you priced out a Lexus with typical options lately? Tesla put their first Model S prototype into car shows in 2009, a full decade ago. Lexus is a decade behind.

Toyota is dragging their feet, and no matter how many strawman fallacies you build won’t change that.

You, and John1701a make the “cost” argument, like its off the books of an auto-maker.

It’s Toyota’s customers that probably would disagree with this most, and why Toyota recently admitted its defections to Tesla. The Toyota customer is both loyal, and pretty dedicated to “cost”, or Total Cost of Ownership (TCO). That’s the one that counts, supposing manufacturers don’t shut EVs out.

I’m starting to see the strategy: Pull out of the product, heavily advertise what you claimed everyone wanted anyway, pay for your ZEV credits and complain “nobody wants them, it’s all mandates”. I wouldn’t bank on SCOTUS rolling over on states rights, or a million cars from Tesla not putting America’s EV education over the line.

Maybe I’m all wet, and everybody will keep loving their hybrid synergy drive. What the heck, gas is cheap, Khashoggi is dead, and global physics are cancelled.

I give Toyota a ‘little’ credit in that the Prius Prime is a good car for what it is – I just wish they’d offer a bit more variety.

But they seem to be half as bad as GM when it comes to reluctance to try a new model (GM is twice as bad for discontinuing the best selling plug in ever in North America, at the drop of a hat, so to speak, when they’ve spent $Billions on Fuel Cell technology and have very little to show for it (per Bob Lutz)).

At least Toyota intends to keep making the PP – you have to give them credit where it is due – and they’ll also get sales from people who would otherwise have purchased the discontinued Volt. But their main source of competitive pressure seems to be the Honda Clarity – another very fine Japanese vehicle – this time with decent size and electric mileage.

I wish people would stop talking about the Bolt’s “crossover like versatility “ – it has lousy cargo space , so even if you were going to take the family on a trip using the long range, you wouldn’t be able to fit almost any luggage in there. (See Bjorn’s banana box tests. )

Try putting a family of 4 in and a load of groceries? Not going to work. How about a stroller with room to fit some other stuff? Also no.

If GM had made the Bolt 6” longer, it would’ve done much better. Also, you can’t write about low Bolt sales without mentioning how terrible GM dealers are at trying to sell it. It’s almost like GM has been trying to not sell them.

I just took your advice and watched the Bjorn banana box test on the Bolt, and he was impressed with the storage: 5 banana boxes, same as the Kona or Leaf … looks like a lot of space back there to me. Compare it to small CUVs and its storage is a little lower than most, but not very much.

I.e. Bolt cargo volume 16.9 cubic feet vs Kona 19.2 or Soul 18.8

The Bolt is a very small car, and it has great cargo storage for such a small car. With it’s hatch and fold-down seats it’s fair to talk about it’s ‘crossover-like versatility’, though you are right to note that it’s not exactly built to be a week-long family vacation hauler you are way wrong to say there’s not room for a full load of groceries.

Exactly it’s pretty good tall hatch

I think you are reading too much into the term “crossover”. The term crossover doesn’t mean that much, it is just a common marketing buzz term to sell the latest generation of vehicles in a long line of constantly evolving vehicles. It isn’t a hard and fast definition.

Somehow the majority of the rest of the world has managed to do fine with even smaller cars on average. And even the US market in the 80’s, 90’s and early 2000’s managed to do fine with much smaller vehicles. Try sitting in an 80’s Honda after sitting in a Bolt.

“It’s clear the Bolt is not what consumers are looking for”

It is? It’s doing alright. Suffers from the lack of range that keeps all EVs from taking off, but it’s a solid choice for now. Personally once it’s time for me to trade in my current car, the Bolt is definitely on my list of vehicles to check out.

Best selling non-Tesla BEV in the US…that’s worth something, right?

Sure, about as much as a Mary B. interview.
https://www.cnbc.com/2018/03/07/mary-barra-gm-ceraweek-chevy-bolt.html
Her Policy of Truth.

That’s like claiming GM is the smartest kid on the short school bus. No traditional automaker is making the effort to build EVs in real numbers.

Sure, sure. “That’s worth something” statement is almost as good as, “Well it’s better than nothing.”

So you’ve got that going for ya..

Main problem with Bolt (and I have one) is lousy DCFC speed. My Model 3 LR will put 200 miles on the battery in about 1/2 hour if the SOC is below 20%. Makes it really excellent for long-distance travel as every 3 hours or so I stop for 1/2 hour anyways.

Bolt will do only 75- 100 miles in 1/2 hour which means I have to stop every hour to hour and a 1/2 if I can find a working charger when and where I need one.

On luggage, Bolt’s luggage bay is not very deep but high with the rear seats up. You can certainly stack up baggage but it is compromised by doing so since it can shift a lot or fall over too easily. With the rear seats down the Bolt has excellent cargo capacity.

And it is painfully obvious that GM is somewhat following Ford down the path of being primarily an ICE truck and large SUV company which is going to kill both of them if gas prices spike up significantly and stay there for an extended period like could happen due to a war or other big negative event.

” My Model 3 LR will put 200 miles on the battery in about 1/2 hour if the SOC i”

Your Model 3 LR also cost 50% more…

Yes and driving the future always costs a little more doesn’t it?

But if you really hung up them compare the Bolt’s DCFC speed to the Kia Niro/Hyundai Kona which are also much faster then the Bolt’s.

MMF; how many Bolts can you drive at one time…?😉

Been waiting for OPEC reduction of production and price hike

Hardly a surprise. Just how many money losing evs could they make, not that many, as I suspected. So lies from Mary Barra are not really lies at all, just musings, that should not be taken seriously.

“Perhaps this is because the automaker said it lost some $9,000 on every Chevrolet Bolt EV sold”
WRONG. GM has never publicly commented on specific numbers regarding how much it loses/makes per Bolt sale. The $9k figure was originally from a “Bloomberg report” whose sources were never divulged. So the above line is flat out wrong and should be amended in the article.

I was amazed it was as good as it was, coming from GM, and their lack of expertise with an ev drivetrain. Then it was revealed that it was LG Chem, that made that, and my consternation was resolved.
Of course numerous things about the car aside from the drivetrain have been dinged.
Seats, suspension, hard rock interior, slow DCFC, as Get Real points out.
Still it’s an ev an automatic “C”, and not too bad so I still give it a “B”, even with little to no charging support, but hey, it’s a city runabout, and for that it’s just fine.
I think it was $8995 per car that they actually lost on each unit, but that number probably came down some. That was the basis for my analysis that they would never actually mass produce the vehicle. You can afford to lose money on 10k but not on 100k vehicle. So they cut and ran in Europe, shut down some factories and laid off workers, to help fund their foundering ev efforts, and their purchase, of the yet to make any money, Cruise division.

Who source that number

Yah, and she also said they have never had any battery failures either, that they would grow manufacturing in the US and that the sky is really purple, just more B.S. from Government Motors…..now slam away!

No, really baby I’m gonna get clean I swear. I promise I’ll get clean tomorrow but tonight I’m gonna take just one last hit.

There is quite a bit wrong with this story.
1rst – GM has never stated that they loose $9,000 on every Bolt EV sold. GM has always been very quiet on the financial aspects of their EV programs. Everything else has been pure speculation.
https://insideevs.com/swiss-financial-giant-ubs-tears-down-chevy-bolt/

2nd – Diesel sales make up less than 20% of overall pickup sales. So to say that big diesel trucks are paying for the EV future is disingenuous. Certainly GM’s higher margin trucks in SUV’s in general are paying for an EV future.
https://news.pickuptrucks.com/2018/09/diesel-pickup-sales-are-revving-up-study.html

3rd – GM has now converted 75% of their entire engineering staff to EV programs. To say that their EV programs have slowed is just silly. Their EV plans have accelerated. Just because GM isn’t flaunting all of their planned vehicles years in advance doesn’t mean they are sitting on their hands doing nothing.
https://thenewswheel.com/gm-to-integrate-engineering-teams-for-ev-push/

The BEV2 program at GM is still fairly young reaching mid-cycle. BEV3 is under development with many products to come in a couple of years.

“…It’s clear the Bolt is not what consumers are looking for…”
GM didn’t produce one single commercial ad for the Chevy Bolt EV.
Average consumer is unaware about their very existence.

My household has 2 Chevy Bolt EVs. We are very happy with them.

And Bolt EV availability is very scarce in Florida.

They did though. I see tons of internet ads for it. Also there was a Korean ad.
https://youtu.be/j-9syIOCOBE

And this one:https://youtu.be/qkaCRrYTC18

Not to mention all the free marketing they won by beating Tesla to market with a sub-$40k 240mile range EV and the nvevitable comparisons.

And the various awards it won.

They were going to launch the Velite 6 in China, it was delayed because of battery supplier quality issues. Haven’t heard much on that since last year.

They did launch the Bajoun EVs in China.

And they showed the Buick Enspire in China.

This is in line with what Mary said. Focus on China first for the EVs, paid for with profits from the North American truck and SUV market.

Not sure why this comes as a surprise, when this clearly stated before.

How come in every GM related article in the last 8 years, I can consistently find haters such as Get Real and ffbj spewing BS here on insideEV. If I only get $1 for every GM hating comment they consistently make, I would be able to buy a Model 3 Performance Model by now…

That’s your Referral code

Referral? Geez, didn’t you get the memo? No more referral discounts. Everyone gets them now.

LMAO because unlike you I actually own 2 GM EVs both bought new in a 2012 Volt and one of the first thousand Bolts made so that flushes your misrepresentation down the toilet.

I was a GM believer until they started showing their true colors by lobbying against CAFE and Tesla sales and otherwise lying their asses off about EVs.

I will be a Tesla customer for the foreseeable future since they are all in.

Told you GM was lying

They kept reiterating, then they killed Volt which has 53 mile electric range + 42 MPG.
They are just fooling us.

The talk of losing $9,000 on Bolt is false. How come Tesla is able to make money. Bolt is just a smaller version of Trax, running on battery, they should have a huge margin on it.

“How come Tesla is able to make money.”

Is that why the $35K version doesn’t exist and if it does, it would bankrupt Tesla today?

Bolt is the ONLY BEV on the market today in the US that cost less than $38K and have 200+ miles of range.

Oh gawd. Don’t speak the truth here. Nobody wants to hear it. You can tell by the automatic down votes.

They make money on a cashflow basis, the initial investment costs are pushed into long term debt. They will pay off the investment costs, but it takes years to do that, depending on revenue and gross margins. To develop a new car platform is about $500 million to $1 billion, so that has to be paid off from the “profit.” That’s why lower volume vehicles like German luxury cars are unchanged for almost twice as long as popular “average” cars, their investment payoff time is longer. Tesla R&D spending the last 5 years is almost $5 billion

Tesla Makes Money Because they make All their Own Major Components & Power Trains “IN HOUSE” Tesla Keeps all Those Profits In House, While GM Outsources All Of That & All GM’s Profits Go To The GM Suppliers instead Of GM .. 🙁

There is nothing that Big Diesels are currently doing to pay for GM’s Electric Future. GM is using that diesel money to fund the lobbying group they belong to, for them to lobby AGAINST things like CAFE and CARB/ZEV regulations.

What has been funding GM’s electric future has been $7500 US Fed. Tax incentives in the US and incentives in China that has incentivized EV purchases that has allowed them to build EV’s. Proof is that GM is building and selling the most EV’s in the places where there are the biggest markets for incentives and mandates, and they are killing plugin’s in the US where they are losing incentives.

GM is Doing Their Very Best To keep The Fossil Fuel Dream Alive .. * 🙂 🙁 *

Wrong. The American consumer is doing their very best to keep fossil fuel alive. BTW, it’s not a dream, it’s a reality. If you don’t like fossil fuel transportation, then I suggest you talk to every single person you know that drives a fossil fuel powered car and do your best to convince them to change. That’s where real change comes from, the individual, not some corporation, or government.

Also, GM is not doing their very best to keep fossil fuel alive as they didn’t have to make the Bolt. In my case, they certainly prevented me from buying another new fossil fuel powered car as I would have without doubt have done. Had they continued to just bang out Volts and Spark EVs, my daily driver would likely be a Fiat 124 Spyder, or possibly a Mini Countryman, but they did make the Bolt and so they screwed up in their mission to keep fossil fuels alive by forever poisoning one consumer with the forbidden knowledge of the BEV.

They did need to make the bolt.

Paying for cafe credits was driving up their price. It was transferring cash from then to Tesla.

Best way to lose is to make your enemy stronger while making yourself weaker.

Wait, she also said they’ve nevrr replaced a battery pack and we know different.

So believe it when we see significant production volumes.