General Motors has a vehicle profit weapon unlike any product from any other automaker in the world. The GM profit juggernaut consists of their full-size pickup trucks and full-size SUVs. The Chevy Silverado, Tahoe, and Suburban, combined with the GMC Sierra and Yukon drive a tremendous level of profit for the company, possibly unmatched by any automaker in the world. GM then stretches the power of this profit machine by selling a Cadillac Escalade, which has one version that tops out at $153,000. Nothing from any other automaker can match the financial power of these six vehicles given the combination of their volume and the margin generated by these models.
Between 2020 and 2025, GM will have invested $35 billion in global electric and autonomous vehicle development. Much of this investment is being financed by the profits from the company’s full-size pickups and SUVs. By 2026, there will be electric versions of each of these GM vehicles as well. The popularity of these models today are important to GM’s electric vehicle future. Since 2020, GM has been selling more full-size pickup trucks than Ford and its perennially popular F-Series pickup. Tahoe, Suburban and Yukon have 70% retail market share in the full-size SUV segment in the U.S. Escalade captures over 30% of retail share in the large luxury SUV segment. While the median age of the overall Cadillac buyer is 60, the median age of the Escalade buyer is nearly 20 years younger at 41. The Escalade buyer has a median household income of $190,000. The median household income of the overall Cadillac buyer is much less at $140,000.
This combination of high sales volume, pricing power, along with different and richer buyers for GM’s full-sized pickups and SUVs, should translate into advantages for the company as it transitions to an EV future over the next few years.
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