General Motors’ Q2 earnings call revealed a lot about its EV operations today. Despite CEO Mary Barra herself remaining optimistic about the conglomerate’s electric future in recent public appearances, some of its EV manufacturing plans have been pushed back. The Orion Assembly plant in Michigan that's meant to make the Silverado EV has been delayed. Again. And though there are several electric and plug-in hybrid options for the brand in China, you can forget EV Buicks for a bit.
This Orion delay is one of the reasons why GM won’t hit its original goal of 1 million units of EV production capacity in the U.S. by 2025. However, pay attention to the language used by GM here: it doesn’t seem like there’s a technical issue as to why the factory isn't up and running. Rather, it's probably the usual "uneven demand" delays on new EV investments, and as Barra alluded to on today's call, the uncertainty over the looming election isn't helping things.
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GM is down. Everywhere.
GM CEO Mary Barra revealed during its Q2 earnings that its EV sales are up 40%. However, globally it is down as China sales continue to erode. It sold 1.43 million units, down from the 1.58 million units of last year.
GM Chief Financial Officer Paul Jacobson said “We continue to make sure we continue to scale the business to customers and where they are at,” which points to concerns about demand, rather than ability. And as for politics, "I would say what's really important to the company overall is to have regulatory certainty," Barra added. "We'll be watching with interest as we get past the election and look at what the regs will be if they change at all. But I think we have the flexibility to moderate based on what we see."
Gallery: 2024 Chevrolet Silverado RST EV First Drive
This isn’t great news for GM’s plans to fully electrify, but perhaps it comes with its own silver lining.
The Silverado EV’s reviews haven’t been great. Most of the variants on sale right now are very expensive, although Chevrolet does have plans to introduce lower-trimmed, cheaper variants of the Silverado EV next model year. Even though Silverado EV sales make up a sizable portion of GM’s growing EV sales, it’s not clear if that will grow with more factory manufacturing capacity. Stalling the factory a little bit is a way for GM to ensure there’s sufficient demand and that it won’t churn expensive EV trucks out while incentivizing them to move, thus only adding to its losses on EVs.
Questions about demand aren’t just related to the big trucks, either. Buick once said that all of its future model introductions would be fully electric going forward, but Barra now says that it would delay its first EV. This car was originally meant to be introduced this year.
Currently in China, Buick sells two Ultium-based vehicles: the Blazer EV-sized Buick Electra E5, and the Equinox EV-sized Buick Electra E4. As Automotive News reported recently, both were eventually expected to be imported directly from China, but the new 100% tariff on Chinese-made EVs has thrown a wrench in GM’s plan. Americans have been driving Chinese-made Buicks for years, but that was before the tariff crackdown. Add in softer-than-expected demand according to Barra, and the Electra E4 and Electra E5 seem on hold until further notice.
Arguably, this might be worse news than the delayed Silverado EV production for several reasons. First, GM has had issues selling the Electra E4 and E5 in China. These two models were introduced right before China’s infamous EV price war, and thus GM has cut pricing to keep the models competitive. Yet it wasn’t enough to keep people buying, since sales are down globally, including China.
Secondly, I got some seat time with the Electra E4 and E5 while I was in China. From a static impression, both cars seem fine, but also very much of the current generation of cars. That’s worrisome because the EV market moves at light speed in China. And if the Electra twins show up to our market several years later essentially unchanged, they could end up feeling like older, dated products. I’m not convinced the Buick Electra E4 could take on the Rivian R3, nor would the Electra E5 even have what it takes to battle against a refreshed Tesla Model Y.
Regardless, GM says it will continue to add EV production as more buyers show interest.
Contact the author: kevin.williams@insideevs.com
