(Bloomberg) —
General Motors made an eyebrow-raising move this month with the Chevrolet Bolt hatchback and its slightly bigger cousin, the Bolt EUV.
At a time of incredibly scant car supply, with dealers often charging thousands of dollars above sticker and consumers waiting weeks or months to take delivery, GM slashed the price of these electric models by about $6,000.
GM only just started building these vehicles again in April after stopping assembly for around nine months while it wrestled with a vexing safety issue. The automaker recalled all of the roughly 142,000 Bolts ever sold over a rare tendency for their batteries to catch fire. Two months is hardly enough time to restock dealerships and get a good sense of demand.
So what’s happening here? It appears GM is trying to buy a bigger share of the EV market while it ramps up production of newer, top-dollar models. It had to be painful for Chief Executive Officer Mary Barra to watch fierce rival Ford pass her company in US electric-vehicle sales last year, with the Mustang Mach-E carrying the Blue Oval to a second-place finish behind Tesla.
This race for the silver medal will remain a fun one to watch, with Ford rolling out the F-150 Lightning pickup and GM countering with the GMC Hummer truck and Cadillac Lyriq SUV. Next year, Barra will launch electric versions of the Chevy Silverado pickup and Equinox and Blazer SUVs. The cavalry is still over the hill.
Counting on the Bolt hatchback and EUV for volume in the meantime will be tricky. Both are on the small side for a nation of consumers who love their big pickups and SUVs. Both run on GM’s older-generation batteries rather than its much-ballyhooed Ultium packs. Chevy kicked off an advertising blitz in April to jumpstart sales when production resumed, but flooding the airwaves is no way to make up for being outclassed by new competition.
Before the price cut, the Bolt EUV sold for $33,500. GM and Tesla both have used up the $7,500 federal tax credits their US customers were eligible for, putting their electric models at a disadvantage. Kias are still eligible for this incentive, which brought the cost of the Korean brand’s sharp-looking EV6 down to only about $1,000 more than the much older Chevy. Hyundai’s Ioniq 5 is similarly priced. The perk also puts Ford’s $45,000 Mustang Mach-E within a few thousand dollars of the Bolt EUV, and it’s bigger, newer and sportier.
To be fair, the Bolts do offer competitive range. The hatchback can go 247 miles on a charge, and the EUV gets 259 miles. This compares with 232 miles for the Ioniq 5 and around 220 miles for the Kia EV6 and Mustang Mach-E.
Electric vehicles are now coming to market at a much faster clip. GM may have gotten out ahead of many automakers other than Tesla with the Bolt, but it didn’t prove to be the antidote to the Model 3.
GM wants to stay in the EV race in the US while scaling production of Ultium-based vehicles. To do so, the company had little choice but to bring Bolt prices down.
These won’t be the last discounted EVs we’ll see. At some point, Ford, Kia and Hyundai’s models will be challenged by something newer and more stylish with better batteries. Shoppers will always have shiny new objects to admire along with duller, marked-down ones to consider.
To contact the author of this story:
David Welch in Southfield at dwelch12@bloomberg.net
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