GM’s National EV Proposal Hides Call To Roll Back Vehicle Efficiency

2019 Chevrolet Bolt

OCT 31 2018 BY BRADLEY BERMAN 63

Is GM pushing EVs while undermining overall MPG targets?

General Motors last week called for a nationwide zero-emissions vehicle credit system. The proposal was made in response to the Trump administration’s plan to freeze vehicle efficiency standards. The Union of Concerned Scientists quickly fired back, arguing that GM’s plan “may sound like an innovative idea,” but it undermines the country’s progress to higher vehicle efficiency and reduced emissions.

“GM’s ZEV proposal is hiding a call for a rollback of fuel economy standards,” said David Reichmuth, senior engineer for clean vehicles at UCS, in an interview with InsideEVs. “General Motors is a leader in EVs, and yet they are also calling for reduced efficiency standards for conventional vehicles. They can do good things and bad things at the same time.”

The Trump administration’s proposal would keep the average fuel economy of passenger vehicles at 37 miles per gallon through 2026. Under current rules adopted by the Obama administration, fuel economy would rise to an average of 47 mpg by 2025. There is a broad coalition of automakers, state governments, and environmentalists that oppose the Trump administration’s plan to freeze vehicle efficiency standards.

Reichmuth said that GM recognizes the long-term need for vehicle electrification regarding economics and climate change. The company plans to launch 20 EV models in the next five years. “But that’s different from their short-term sales strategy of selling as many SUVs and pickup trucks as they can now,” he said. “We need to separate GM’s 50-state proposal from what they’re doing on electrification, which is very positive,” said Reichmuth.

It’s a wash on EV sales number but not on EV policy.

The UCS engineer is a Bolt driver. “It’s the first long-range, affordable battery-electric vehicle and that’s what I was waiting for,” he said. “And it’s the most fun to drive of any car I’ve owned.”

Reichmuth explained in his blog post that GM’s proposal for a 50-state ZEV sales requires less than 5 percent of ZEV sales in the US by 2025. California electric vehicle sales are already at 6 percent in the first half of 2018. California and other so-called ZEV states are set to require about 8 percent ZEV sales by 2025.

Reichmuth suggested that the zero-emission standards could be gamed because GM’s system would multiply ZEV credits by six-fold for automated electric vehicles, like the hundreds (or perhaps thousands) of self-driving Bolts going into fleets. Reichmuth said those credits could effectively reduce the total required number of EVs to as low as 3 percent of sales by 2025.

In 2017, GM CEO Mary Barra announced that the Chevrolet Bolt is the company’s test vehicle for self-driving.

Reichmuth admitted that GM’s nationwide plan could result in roughly the same total number of EVs across the country compared to the current landscape in which California and nine other states have much higher EV adoption. “It’s a wash on EV sales numbers, but it’s not a wash on what it does to EV policy,” said Reichmuth. “It’s not helpful to get rid of California’s ability to set their own standards.”

The ability for California to push the boundaries on electrification is critical to making sure that automakers produce and sell EVs for the full range of vehicles from compacts to SUVs. “There’s an advantage to having some states go further that you wouldn’t get if you spread it out over all states equally,” said Reichmuth.

InsideEVs reached out to General Motors for comment, but we haven’t heard back yet.

Update – Nov. 1: A GM spokesperson replied by explaining, “The proposed National ZEV program was modeled on the current ZEV framework with the benefits expanded nationwide. As part of the program GM recommends establishing ZEV requirements (by credits) each year, starting at 7% in 2021, increasing 2% each year to 15% by 2025, then 25% by 2030.”

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63 Comments on "GM’s National EV Proposal Hides Call To Roll Back Vehicle Efficiency"

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Lawrence

Legacy manufacturers have an inherent issue, where they need to keep the status quo, they don’t want EV’s to cannibalize their lucrative ICE business, but they need to offer EV’s to keep customers from defecting from their brands. This is exactly why they make a big deal about their new EV’s and make very few available.

MaartenV NL

By making an EV they validate the concept of EVs. Thereby increasing overall demand. When not making enough EV available they increase the defection of their customers to other brands that have ample supply.

I agree that the position the legacy carmakers are in looks like between a rock and a hard place. This GM proposal is exactly the wrong way to get out of it. The only way out of it is moving forward faster than the competition.

In concreto, this means to increase production of the Bolt, lower the price of the Bolt, upgrade the Bolt with better fast charging.
To not cannibalize the sales of the top sellers, start with putting a Bolt drivetrain in all lower selling models. Again with enough production and at prices just around break even. It is about winning market share, not yet generating profits.

Only when customers getting vocal about EV versions of the top sellers, replace those with battery only models. Don’t waste time and resources on hybrids (with or without a plug), their time has past.

Using this scenario GM can be at 100% BEV before 2025, profitable and surviving. Keeping on the current path is a sure way to liquidation of the company.

Spider-Dan

This “cannibalizing ICE business” claim doesn’t make sense. The economy car market – where legacy automakers have the bulk of their EV offerings – are not particularly profitable segments anyway. The luxury car market is, but cross-shopping a Bolt and a CTS doesn’t make any more sense than cross-shopping a Bolt and a Model S. Likewise, if you’re looking for a (high-margin) SUV or pickup truck, how are you going to be talked into a buying a Volt instead?

If legacy automakers wanted to approach EVs strictly as a profit generator, they would be doing the same thing Tesla is: making luxury cars. But right now, most are approaching EVs as a regulatory requirement, and are therefore making heavily subsidized economy cars to hit regulatory targets. The only legacy automakers that see entry-level EVs as a growth market are Nissan, GM, and maybe Mitsubishi… and their sales in that segment don’t really threaten their ICE sales (in the same segment) at all, because those cars aren’t profit-leaders in the first place.

Pushmi-Pullyu

I’d say it’s more that sales in the relatively low-end compliance car segment don’t threaten their ICEV sales both because the compliance car EVs are made in low numbers and because they’re priced like a car in a significantly higher segment. For example, the Bolt EV has a MSRP of $36,620, but aside from its electronics and displays, and slightly roomier interior, it’s no better than a Sonic, which has an MSRP of $15,420.

Spider-Dan

If you take the drivetrain out of a Mustang or Challenger, they aren’t much different than a Civic.

Saying that a Bolt is similar to a Sonic “except for it’s electronics and displays” is no different. You aren’t going to get a high-end interior in a sub-$40k car, so what does that leave?

David Cary

I don’t think in a room talking this out, there would be significant disagreement. I think we can all acknowledge that you can find lots of cars with better interiors at $36k. Interiors are not binary – low-end and high-end.
And no one is expecting parity at same cost either.

Cypress

You obviously have driven neither vehicle, if you think the Bolt is no better than a Sonic.

Why don’t you take and actual look at what doesn’t come standard in that $15k Sonic vs a Bolt, and the performance. And the interior size.

Pushmi-Pullyu

The Bolt EV has often been criticized as having a “cheap plastic interior” with hard plastics everywhere. You’re right, I’ve never been inside a Bolt EV. But nonetheless, I’m betting that “cheap hard plastic interior” describes the interior of the Sonic, too. Amazingly enough, it is possible to learn many things by reading about them rather than thru direct personal experience. Some things do have to be experienced for learning to happen… but many don’t.

I agree that we can’t expect a $35k-37.5k BEV to have as good an interior as a comparably priced gasmobile. But I do expect it to have a better interior than a $15k gasmobile!

antrik

I wouldn’t count GM among the makers who treat entry-level EVs as a growth market — not yet. They claim that they will going forward, once they have their next-gen EV platform ready — but then again, by that time we will also see VW and other legacy makers doing the same…

Spider-Dan

For two successive generations now, GM has released both a PHEV and a BEV that (at introduction) were leaps and bounds ahead of anything in their price range. VW and Daimler are a full generation behind GM; their future products will be competing in featuresets with the Gen2 Volt and Gen1 Bolt, which are already more than halfway to their successors.

David Cary

While that is true, they haven’t really had significant success in the marketplace. I mean in 2018 when we talk about an EV selling 100,000 copies per year as success.
Engineering yes, packaging and marketing no.
Anyone following the EV marketplace knows what they could do. They could build a vehicle in a popular segment and give it an EV drivetrain. They don’t do it and they have had time. I wouldn’t buy a GM at this point just like I would not buy a VW either.

Spider-Dan

Unless “popular segment” means “luxury car,” I would say the reason why GM hasn’t done it is the same reason no one else has: it’s not currently feasible.

I mean, in this very thread we have EV advocates saying that the $37k Bolt is just a tarted-up $15k Sonic. Now imagine GM releasing a “compelling” PHEV Equinox with towing capacity and 50 miles of range… for $55k.

There is one vehicle on the market that I would classify as a mainstream, no-compromise car in a popular segment: the Honda Clarity PHEV. It doesn’t look like a spacepod, it comfortably seats five, and it has over 40 miles of range. Fewer than 20,000 people will buy one in the US this year.

The demand for EVs in the lower-end market does not exist, likely for the reason Pushmi just stated: why pay $20k extra for a car that’s “no better than a Sonic”? If even EV advocates think the difference isn’t meaningful, what do you expect the public to think?

Pushmi-Pullyu

Thank you! Those who actually drive the Clarity PHEV seem quite impressed with its engineering, as well as how it comfortably seats 5. (Admittedly the appearance/ styling is more of an “acquired taste” at best. 😉 ) This is what the Chevy Volt could have been, and still could be… if GM was actually interested in selling the car in larger numbers.

As far as <20,000 people in the U.S. buying the Clarity PHEV this year: Is that due to lack of demand, or lack of supply? Not a rhetorical question; I don't know.

(⌐■_■) Trollnonymous

GM is a Wolf in Sheeps clothing.

ffbj

It’s now 4 years left. You see when you announce something and a year passes, then you take away a year. It doesn’t stay at 5 years ad infinitum. GM is full of it. They want to sell you a gas SUV or a Truck, something they make a lot of money on, not their ev, which they lose money on.

Get Real

Exactly and this is why I am losing hope in GM.
They have some of the best engineering in the world but their management and other legacy inertia is dragging them down.

I will be turning in my Bolt at the end of its lease in a year and won’t look back as I drive a Model 3 instead and my 2012 Volt will soon go to one of my kids.

Joel B

For that reason I think GM seems completely bipolar. Half the company wants to do amazing things with EVs (e.g.: the engineering side) while the other half (management) wants to be short-sighted and sell as many SUVs and trucks as possible.

Hoss2626

I am hoping they spin off the Cruise division.

ffbj
I don’t know, they just bought them. I think want to integrate Cruise into a lot of their line, the ones that aren’t being discontinued. Not to say that that idea is completely out of the question, but I think they want to use Cruise as a counter to Tesla’s auto pilot. ATM they are riding high, as in Tesla, both with strong quarters, but GM’s is on falling sales, and cost saving measures, along with the popularity of their Trucks, SUV. For years investors have been whining about the weak stock price, and now up off the floor, and not down for the count GM pops up, only to immediately scale back by offering 1/3 of their executives (18K) in NA buyouts and if those aren’t big enough then lay-offs will ensue. I think GM is smart to do this. They are selling fewer vehicles, -14% ww, ytd, the money is the high end, and also protection from superior ev products which do yet exist in segments where they dominate. Shrinkage in the affordable models segment, and more of a top-down Tesla strategy, with continued average selling prices rising. It’s true they are losing money with Cruise,550 million or… Read more »
Dav8or

Unless you are Tesla. Than you add on as many years as required, no problem. Totally understandable. Everybody else. STRICT ADHERENCE TO PROJECTED DATES ONLY!!!

“GM’s proposal for a 50-state ZEV sales requires less than 5 percent of ZEV sales in the US by 2025. California electric vehicle sales are already at 6 percent in the first half of 2018.”

Apples and oranges. But I would like to see higher targets for national sales than 5 percent by 2025. 10 percent (or higher) would be more like it.

Roy_H

Market demand is already higher than proposed government requirements. They have become irrelevant.

Pushmi-Pullyu

That’s the point: GM wants the “mandate” to be lower than it plans to build, to give the company some leeway in its plans.

Cypress

Or they think they will be far exceeding that number and can profit by selling the credits to laggards like Ford, Chrysler, Mazda, Subaru, Toyota, BMW, etc.

antrik

Not entirely irrelevant. Unfortunately, most legacy makers thus far don’t give a damn about market demand — they won’t ship EVs unless mandates require it.

Let’s just hope this changes over the next couple of years…

Dav8or

And you know this because… ? Clearly you haven’t driven outside of California, or the east coast. Drive around in the middle of the country and get back to me about all this “demand” you see.

David Cary

I think we can all agree that the center of the country is not very forward thinking. I think we can also agree that EV demand is increased like a virus. The center of the country is not infected yet. It is interesting that the argument is being made that the center of the country is more than 7 years behind California. Actually the argument is that the average of 50 states is more than 7 years behind CA.
(I don’t live in CA although I was born there).
I live in an EV pocket where 5% of sales is probably right – and I am not in CA. We had 4 EVs in a row yesterday pulling into school (1 was mine).

antrik

Extrapolating from current trends, we should see about 25% of global automobile sales being EVs by 2025. Any mandate lower than that is pretty much just symbolic…

Will

Can I have what you are smoking

William

GM is showing their TRUE colors once again. GMs EVs are falling further behind Tesla in sales and orders. This should buy them some needed time, to better close the gap, by further extending their profits on their existing ICE lineup.

Now, who does Mary B. make the check out to, to make sure that this New and Improved Nationwide ZEV Credit System, gets the proper “wink-wink / nod-nod” MAGA rubber stamp treatment?

https://goo.gl/images/jKD76e

esto perpetua

Finally, the obligatory conspiracy theory. What took so long?

William

Too Busy with the costume!
It’s the one night in North America, where I can wear my Tin Foil hat out in public, and just fit with the rest of the monsters, and be part of the party!😱

David Cary

Are you saying that lobbying is a conspiracy? Mary doesn’t make the check out from her personal account but that doesn’t change the flow of money.

S3XY

Scust. 2 more payments to GM and then my money will go to Tesla!

Sz

And you will be ridiculously happy once you do. They are amazing.

Ocean Railroader

If I were GM I would be quite worried about the idea of Tesla talking about building a 1000 cars a day and them wanting to go to 10,000 cars a week.

Or Tesla complaining about the Gigia Factory not being big enough to keep up with car demand.

Based off how bad the electronics are on a GM car that ate me out of house and home I think owning a self driving Chevy Bolt would be a gizmo repair nightmare with a 500 dollar car repair bill every week or two.

The way I feel I don’t care what GM does now with gas powered cars Tesla and a reticent Nissan are the main EV show in town.

DAVID

You wont’e be able to own the self driving bolt.

Wouldn’t 5 percent of national car sales being EV be a lot more EVs on the road that California have 6% and nobody else having any mandate at all? I mean, I assure you here in Texas we are nowhere near 5% of all vehicle sales being EV.

antrik

The point is that a somewhat strong mandate in a narrow market likely does more to push makers to create somewhat decent EVs than having weak mandates in a broader market…

Spider-Dan

So 8% is “somewhat strong” but 5% is “weak”?

Get Real

Here it is for the math challenged: 8>5!

Cypress

The entitled Californians don’t understand what an EV desert the rest of the country is, and how much EV choice they really have compared to non ZEV mandate states.

Mark.ca

And who’s fault is it that you don’t have choices? CA is were they are because they been pushing this for decades. It’s their efforts starting to pay off. Instead of complaining why don’t you just go and buy one of the used evs that come from these “entitled Californians” and show your local politicians there is demand for evs.

David Cary

The number 1 selling EV in CA has been available nationally for years as far as I can tell…. Those myriad of compliance cars are now a rounding error.

David Cary

Well the air quality in CA doesn’t really care about TX all that much. Are you saying that CA should sacrifice their mandates for the greater good?
We should remember that we are not counting apples to apples. The CA mandate by 2025 is something like 20%. TX will be well past 5% by 2025. The market is already above mandate in TX (0) and will be way higher by 2025.

Nelson

My future car purchases will be from companies selling only EVs.

NPNS! SBF!
Volt#671 + BoltEV + Model 3

Mark.ca

Well, at least you won’t have to shop around much.

Joel

Meh – the shock and awe of developments starting with the Roadster 2 unveil has pretty much rendered this moot over any time frame worth fighting over. The floodgates have opened in China, Electrify America and Ionity in Europe are bringing Tesla-alternative infrastructure, and Rimac’s proved demand for hyper-specced electrics even at hyper car prices. The change is coming faster than I expected, so who gives a frig if gov pulls back at this point? It’s not worth worrying at this point.

antrik

I agree that the transition will happen regardless — but at this point, strong mandates can still make a difference in accelerating the transition.

Also, abandoning fuel economy standards in favour of a weak ZEV mandate means until the transition is complete, the remaining combustion car sales will be worse gas guzzlers…

Cypress

I don’t think the proposal was to abandon CAFE for ICE.

What changes GM originally wanted from CAFE was more credit for EVs, PHEVs, autonomous vehicles, and ridesharing vehicles. But Pruitt went way farther by attacking CARB. Exactly what GM does not want.

AP

They’re almost as bad as the German manufacturers. Pretty soon they’ll be cheating on emissions too, or maybe they already are?

Pushmi-Pullyu

“GM’s ZEV proposal is hiding a call for a rollback of fuel economy standards”

Sadly, that’s pretty much exactly what I expected from GM. 🙁

And it’s why I didn’t jump right in and give my opinion of the plan in response to IEVs’ first article on the subject. I suspected something to delay the EV revolution was hiding in there.

Will

I’m fine with GM. I got a Volt to sell. I’m so disappointed ☹️ with GM. Now it’s Tesla model 3 and i3rex

Milfan
Before the governments talk about replacing ICEs with EVs, why not they first ensure that all vehicles are at least plugins with 10 km (6 mile range). A hybrid like Prius/Ioniq has only 1.5 KWh battery and yet they get 50% increase in mileage. If this battery capacity can be bumped to 2.5 KWh, the vehicle can easily hit 10 km (6 miles) considering the fact that Prius Plugin (Gen-1) had 18 km(11 miles) range with just 4.4 KWh battery. Of course the motor power and size should be increased and a plug should added. At a price of $200/KWh, the 2.5 KWh battery will cost just $500, adding the cost of plug, cable, bigger motor, etc will cost another $1,000 – $1,500. So for an extra $2,000 we can have a car that goes 22 km/l (55 MPG) and also 5.4 km/KWh (3.4 mile/KWh) when it runs on battery at least for that short distance. Overnight charging for commute to office and daytime charging for return home means 20 km (12 miles) can be driven with battery itself. This extra $2,000 will be easily recovered from both the higher mileage and the cheaper electricity. For those who have garage,… Read more »
antrik

You are using the fuel savings of a regular hybrid to justify the incremental cost of a super-minimal PHEV over a regular full hybrid? That doesn’t make sense.

Frankly, I doubt the low all-electric mileage of such a super-minimal PHEV justifies the cost at all. In terms of gas savings in relation to cost, a PHEV with a decent-sized battery makes much more sense.

Quiviran

Wonder what would happen if Federal CAFE was just abandoned. Let the legacy manufacturers do what they want. Let the States do what is right for them. The BEV hockey stick is rapidly approaching. Let them deal with it in accordance with free market economics and their own best ideas. I think the time for CAFE is past, just let it die.

Dav8or

No, no, no!!! You must FORCE people into the “revolution” whether they want it or not. It has nothing to do with making the best car for the money, or the best car for an individual’s situation. It has everything to do with removing options and dictating what to buy based on opinions of the elites.

Thank you all in advance for your down votes!

Mark.ca

Ignorant as usual.
I’m down with you driving whatever pos you want as long as you filter your pollution through the car cabin. Let’s see how you like to deal with the problems you are causing and not pass them on to others.

David Cary

I think we have learned that human greed trumps the desire to be a good citizen of the earth.

Cypress

I think it Makes sense to give more credit to automous and ride sharing fleet EVs. They are going to be doing a lot more miles on average, than the typical privately owned car.

And GM has made no secret that they are going to use their very profitable truck and SUV sales to Fund their transition to EVs, AVa, and ridesharing network.

I would like to see an overall higher percentage ZEV mandate in the proposal, but considering the political climate, it would be an decent first effort.

Bill Howland

GM wants to sell a few EV models, but then is using the BOLT for all its autonomous credits – Mary Barra ‘Believes in electrification’ as long as that provides credits so that they aren’t fined for their 100% ICE high profit machines, which is why they want gas mileage rolled back.

I’d feel a bit better about that if they’d just admit what they are doing rather than deceptively telling me what they think I want to hear.

That’s where they have always made their BIGGEST MISTAKES for decades now: Their intrinsic arrogance, constant Banal, Deceptive Talk, and constant trying to always say ‘Just the right thing’ ends up with them actually losing customers, lying at times (as I say NYSDOT called them out on the 2011-12 Volt) – and instead of frank talk about ignition cylinders they instead wanted to please everyone and it cost them $millions.

And I’m not even mentioning the dopey decisions they made prior to evs.

Richard

The real problem for legacy automakers is they cannot currently compete with Tesla EV’s, for whatever reason. I would say that there are some brands and models that can compete to some extent in some markets- Kona, Ioniq, Zoe, Leaf, I-Pace, Bolt. And we are seeing some new models just around the corner from Audi and Porche.

But if you look closely at all these models they are constrained in one form or another against a Tesla- Battery, performance, production, self-driving technology, design, charging infrastructure, cost, brand limitation, etc.

We are seeing a lot of talk from legacy auto and a lot of double talk too. There is only one company that can lead us into the energy transition for the transport sector and that is Tesla because they are unconflicted and unconstrained. Investment funds will flow more to Tesla as the transition proceeds.

Q Continuum

What is there to say? It’s capitalism at its best! (said with a sarcastic voice)…