Steve LeVine from The Information recently called GM’s decision to kill the Chevy Bolt EV, “a big mistake.” GM recently announced it will cease production of the Bolt at the end of this year. LeVine believes this decision is a gamble, questioning if GM’s newer EV offerings like the forthcoming Chevy Equinox and Blazer can fully replace Bolt sales. GM sold 19,700 Bolt EVs in the U.S. during the first quarter of this year, more than every other EV except Tesla Model 3 and Model Y. With this level of Bolt sales, are there other aspects of GM’s decision to halt Bolt production worth exploring? I think there is.
GM has developed an entirely new EV technology platform they call Ultium. Ultium is a modular EV technology system that is the foundation for all new GM EVs. MotorTrend described Ultium as not really an EV platform at all. Rather it is a combination of battery, motors, and software that is the company’s “roadmap to EV profitability.” Ultium underpins all new GM EVs, from the $112,000 GMC Hummer to the $30,000 Chevy Equinox. Conversely, Bolt is GM’s first volume EV, using technology and a product foundation more costly and less scalable across multiple types of vehicle models.
Additionally, GM’s decision to end Bolt production likely is one made with manufacturing labor cost in mind as well. Bolt is produced at a U.S. factory in Michigan, a relatively high labor cost facility. That factory is being renovated to produce two new full-size EV pickup trucks which will be higher margin and have significantly greater volume than Bolt EV (Chevy Silverado EV and GMC Sierra EV). Unsurprisingly, the forthcoming Chevy Equinox EV and Blazer EV, which essentially are replacing Bolt, will be produced at a factory in Mexico, which is a relative lower cost labor factory versus the U.S. plant.
LeVine may be correct in his assessment that “Bolt will missed.” Yet, I believe GM’s newest EV technology investments will not only help replace Bolt sales, but also grow the company’s EV profits.
Disclaimer
TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.
I own shares of General Motors common stock.