General Motors Co. has done a U-turn on the Chevy Bolt, promising to bring back the relatively affordable electric vehicle that it just killed a few months back. That may say more about GM’s long-term EV marketing goals than about profits in the here and now.
The future Bolt will be built on GM’s
GM,
newer EV platform, which is the template the company hopes to use for all its future electric cars and which some of its pricier EV models already use. GM has been keeping other details about the new Bolt under wraps.
Chief Executive Mary Barra said that because of that platform sharing, GM hopes to bring the new Bolt to market more quickly than it would a brand-new EV, but she did not share a timeline.
A GM spokesperson said recently that the company is “not providing details on timing yet” that it but expects to provide an update this year.
The old Bolt, which ends production this year, started its run with the 2017 model year. The vehicle sells for around $30,000, long considered the affordability goalpost for EVs, which are pricier at the outset than traditionally powered vehicles.
GM also plans to keep its electric 2024 Chevy Equinox SUV at around $30,000. Meanwhile, Tesla Inc.
TSLA,
has been at work on a yet-to-be-unveiled $30,000 vehicle to be built on a next-generation platform.
Cars in general have gotten more expensive as they become more loaded with entertainment and safety features. Many automakers have dropped cheaper compact and subcompact sedans from their lineups due to the razor-thin margins on these vehicles — something that is even more true for EVs.
See also: Ford takes a jab at from-the-brink GM Bolt, says it will make more hybrids
“When you are building an EV under $30,000, making it profitable is difficult,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said in an interview with MarketWatch.
“But you need to attract new buyers, and GM needs to have a product below $30,000 in order to be relevant with these buyers and keep them in the fold. The point of the vehicle is not necessarily to make money, but to acquire customers,” he said.
Fiorani said he expects the new Bolt to hit dealerships in 2025 at the earliest. GM is bringing out a range of new EVs next year, including key vehicles such as an electric Chevy Blazer SUV and an electric Silverado pickup truck.
“They have their hands full,” Fiorani said. “If it’s simply a redesign of the current model with more modern batteries, they can roll that out pretty quickly,” but it would still take time to retool factories and line up suppliers.
Related: GM raises profit outlook, tops estimates, but stock weighed down by $792 million recall charge
Fiorani said GM is on the right track by keeping the Bolt, especially with the cheaper Tesla model at its heels. “Tesla is the elephant in the room in the EV market,” he said. “You need to target to wherever they are going.”
Rethinking the Bolt to be more competitive and keeping the name are good moves by GM, Fiorani said. “It’s a good strategy for GM to use what they have and enhance it.”
The end of the line for the old Bolt underscored how hard it is to build a cheaper EV that is also profitable.
“A lack of truly affordable EV options is likely one reason GM wants to keep [the Bolt] around,” said Brian Moody, executive editor of Autotrader.
Because it uses GM’s new EV platform, “I would expect the Bolt to come closer to being profitable,” Moody said. “For some time, the Bolt was GM’s only electric vehicle. That’s expensive.”
He added: “I don’t think GM is looking to the Bolt to create record profits. High-dollar trucks and SUVs will continue to be the profit center for the company for some time.”
Future competition is “always a concern,” but the Bolt, by virtue of being an early affordable EV, has earned a reputation and continues to have equity with consumers, he said.
There’s some room for the Bolt to grow in size — the original model was “quite small,” Moody said — and price, but the car would have to remain in the $35,000 range to make sense.
“I would also expect the new Bolt to take on a more ‘mini SUV’ feel, since SUVs are the kind of vehicle North American buyers have proven they want no matter how it’s powered,” Moody said.
Also read: An average new car will cost you more than $700 a month. Can dealership incentives help with affordability?
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