General Motors announced on Tuesday that it will be discontinuing production of its Chevrolet Bolt EV by the end of the year. The Michigan-based automaker plans to convert the factory currently producing the Bolt into a plant that will manufacture electric pickup trucks.
A record-breaking model
Despite being one of the company’s top-selling EVs, General Motors is halting production of the Bolt. The all-electric car was first introduced in 2016, a decade after the EV1 was discontinued in 2002. General Motors CEO Mary Barra stated that the Chevrolet Bolt EV is one of the reasons why the company is a top leader in the EV market.
According to Barra, General Motors delivered more than 20,000 EVs in the U.S. during the last quarter, with the Bolt EV and Bolt EUV models breaking sales records. The sales figures helped GM to increase its EV market share by 800 basis points and move into the second market position.
Executing the Renovation Project
Currently, the Bolt is manufactured in a 4.3 million-square-foot facility located in Orion Township, a Detroit suburb. The automaker plans to renovate the plant and utilize it for manufacturing electric versions of the Chevrolet Silverado and GMC Sierra pickup trucks, with the renovation expected to be completed in 2022. Barra confirmed on Tuesday that the renovation project is nearly finished.
Barra also revealed that “it’s now time to plan to end the Chevrolet Bolt EV and EUV production, which will happen at the very end of the year.” The Bolt EUV is a slightly larger hatchback model than the Bolt EV.
Managing the transition well
The transition from combustion engines to EVs is being well-managed by GM, according to Edward Jones analyst Jeff Windau. However, Windau cautioned that successful conversion will still be difficult to achieve. As EV sales start to increase and gas-powered vehicles decrease, GM could find itself in a position where it’s not fully utilizing factories for either type of vehicle, which could have a negative impact on profits.
Shoppers concerned about the cost
The popularity of EVs is on the rise, with shoppers becoming more curious about their capabilities, and automakers such as Ford and Tesla racing to assert dominance in the market. However, a recent Deloitte survey indicated that nearly 70% of car shoppers are interested in purchasing an EV but are concerned about the cost. Last month, the average new EV sold for $58,940, up from $58,385 in February, according to Kelley Blue Book.
In an effort to address this concern, President Joe Biden introduced new tax credits as part of the Inflation Reduction Act last year. The U.S. Treasury Department released a list of eligible vehicles for a $7,500 tax credit, and the Bolt, along with four other Chevrolet models, is among the cars that qualify for the tax break.
Partnership with Samsung
General Motors and South Korea’s Samsung SDI announced on Tuesday that they will be investing more than $3 billion in a new EV battery cell plant in the United States. Samsung was selected by GM as a partner for its fourth joint venture battery cell factory after the company recalled around 142,000 Chevrolet Bolt EV batteries made by LG that caught fire. The recall cost GM around $1.9 billion, and the company stated that it was reimbursed for the cost by LG.
While the auto industry has been impacted by a global shortage of computer chips and other parts, General Motors expects to turn low-to-mid single-digit profit margins on EVs in 2025. The company reported profits of $2.37 billion from January through March, up from $1.99 billion in the previous year.