General Motors CEO Mary Barra conveyed at a Sanford Bernstein conference that she does not yet picture the possible profitability of electric cars that cost $30,000 to $40,000 until the decade’s end or “maybe even later.”
Is she right?
At the same conference, CEO Barra recognized that its rival, Tesla, currently leads the EV industry. Nonetheless, she asserted that GM could soon catch up (via Reuters). She also stated that this lead would not be permanent without mass-market EVs.
“Barra acknowledged that Tesla (NASDAQ: TSLA) Inc has the lead in EV technology, profitability and scale, but said that lead is not permanent.”
Reuters
The GM Chief further asserted that battery costs remain extremely high to produce profitable, mass-market EVs that cost $30,000 to $40,000.
However, she forecasted that electric cars will be able to catch up with internal combustion engine-powered vehicle costs “sometime in the latter part of this decade… maybe a little longer.”
These are odd statements given that GM presently sells the Chevy Bolt EV for $26,500 and has stated that the Equinox EV will start at roughly $30,000.
Although production of the Bolt EV will cease at the end of the year, it has never been made clear whether or not GM is generating any money from it. However, the Equinox EV will hit the market this year, with the base model launching before the decade’s end for approximately $30,000.
Nonetheless, you currently do not even need a profitable EV that costs less than $40,000, as you must also consider the context of the larger car industry. For instance, the average US new car sale price is now a staggering $48,000 due to widespread price increases brought on by inflation.
Electric vehicles have already prevailed when the whole ownership cost is considered because of gas savings.
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Nothing about any of this makes a whole lot of sense. Should we anticipate that Chevrolet won’t release the Equinox EV base model until the end of the decade or later? Is $45,000 the new $30,000 by then?
When an automaker complains that “electric vehicles are not profitable,” they are really saying that they cannot produce the attractive, lucrative EVs that consumers are now demanding. It doesn’t follow that others can’t if they can’t.
