It’s looking more and more like the demand for electric vehicle trucks isn’t as high as automakers thought.
That’s one takeaway from General Motors Oct. 17 decision to pause production on its Chevrolet Silverado EV and GMC Sierra EV truck brands. GM says it will “re-time” the $4 billion conversion of its Michigan-based Orion Assembly plant, putting a stop to the automaker's plan to repurpose the plant for EV truck manufacturing.
The automaker is still producing its Chevrolet Silverado EV at GM's Factory ZERO facility in Detroit-Hamtramck (MI) and is looking to add the GMC Sierra EV at that plant next year
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GM is saying the decision only represents a delay in its EV truck line production.
The Orion Assembly plant was supposed to be converted to EV truck production in 2024. Now GM says it’s pushing that date back to 2025 in an effort to improve capital investments and boost truck building improvements that would attract more buyers, the company noted in a statement.
"General Motors today confirmed it will retime the conversion of its Orion Assembly plant to EV truck production to late 2025, to better manage capital investment while aligning with evolving EV demand," the company said in an Oct. 17 statement. "In addition, we have identified engineering improvements that we will implement to increase the profitability of our products."
GM employees at Orion "will be offered other opportunities in Michigan, including positions at Factory ZERO Detroit-Hamtramck Assembly where production has been steadily increasing and significant scaling is planned for 2024, including a second production shift," the company added. "Factory ZERO is currently building the GMC HUMMER EV Pickup and SUV, Chevrolet Silverado EV, and Cruise Origin. It will begin building the GMC Sierra EV next year."
The decision to pause GM’s EV trucks comes only a week after rival Ford Motor indicated it would pull one shift away from its F-150 Lightning EV pickup plant.
The Wall Street Journal has reported that Ford made the decision due to lower-than-expected demand from truck buyers. An internal Ford memo indicated sales for the F-150 have “tanked,” according to The Journal.
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That’s not exactly a shock, as data streaming out over the past several months show demand for EV trucks really is low.
In fact, of all EV lines, regular pick-up truck drivers are the least likely to buy EV trucks, according to data from AutoPacific. Just 12% of full-sized and 8% of mid-sized pickup buyers tracked by AutoPacific say they’re “interested in purchasing an EV truck, as reported by Heat Map.
That shouldn’t be a surprise to automakers, the report notes.
"Pickup truck buyers are typically the most engrained in their roots and opinions when it comes to straying too far from the normal pickup truck DNA,” AutoPacific product and consumer insights analyst Robby DeGraff stated. “Demand for ICE (gas/diesel powered) pickups will never fade and it rages on in popularity, but that type of demand isn’t and likely won’t ever be mirrored for EV pickups.”
General Motors stock is trading at $29.82 on Oct. 18, and share prices are down by 11.36% for the year. Ford stock shares are trading at $11.36, up 1.97% on a year-to-date basis.
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