The company plans to continue selling ICEs.
Adapting to electrification can be tough for consumers, but manufacturers are also having a hard time finding the right balance between EVs and ICEs in their lineup. General Motors is one such manufacturer, saying $30,000 to $40,000 EVs are not profitable at the moment.
The Michigan-based car manufacturer said lowering the prices of its EV models isn't the smartest move for making a profit. The biggest factor pointed out was the cost of batteries, which get a lot more expensive when automakers decide to add range.
Even the Chevrolet Bolt EV, which has a starting price of around $27,000, is leaving the lineup at the end of 2023. It is America's least expensive EV yet the company couldn't keep the electrified hatchback. The Chevrolet Equinox EV is next in line for growing the brand's presence in the electric market, with production expected to being later this year.
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“Battery costs are still not at a point where you can get to the mass market, which is this $30,000 to $40,000 vehicle, that's what the bulk of new car sales are, frankly, around the globe, that C-segment kind of crossover SUV,” said General Motors CEO and Chair Mary Barra at the 39th Annual Bernstein Strategic Decisions Conference.
GM is keeping its EV program alive by continuing to sell its ICE-powered trucks and SUVs. Volume-sellers such as the Chevrolet Silverado and GMC Sierra help maintain a steady cash flow into the company. The company is investing billions in ensuring its ICE models will not go anywhere.
Another challenge GM is facing in its EV portfolio is the underwhelming demand for the GMC Hummer EV, delivering only two units from January to April this year.
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While GM is optimistic battery costs will reduce by 2025 it will be some time before EVs and ICEs enjoy cost parity.
“We know we can get better. We're already seeing it, and we're dedicating the resources to take the cost out. So I do think that, that line crosses some part in the latter part of the decade maybe a little bit longer, but we have teams working on it and taking all the knowledge we had from internal combustion engine because there's a lot of commonality to get these costs down,” added Barra.
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Keyword: GM Says EVs Are A Hard Sell Even For $30,000