General Motors announced the delay of production of its upcoming slate of electric vehicles, including the Chevy Equinox EV, Chevy Silverado EV, and GMC Sierra Denali EV. The news comes amid a broader environment in which EV demand is softening and prices are dropping, even as sales continue to grow year over year.
The delay in production of “just a few months” is intended to protect pricing and enhance viability, GM CEO Mary Barra said. The adjustments will “make the trucks more efficient and less expensive to produce, and therefore more profitable” in the future.
GM is also pulling its near-term targets for EV sales in a nod to slower-than-expected demand growth. The company had said it would sell 400,000 EVs in North America from 2022 through mid-2024 and would produce 100,000 EVs through the end of 2023. The company says it still planned on producing 1 million EVs by 2025.
The delay in production is intended to protect pricing and enhance viability
“It’s clear that we’re dealing with a lot of near-term uncertainty,” Barra said in a conference call with investors Tuesday. “And then also... the transition to EVs, that will have ups and downs.”
Despite the delays, GM beat Wall Street’s expectations for its third quarter, raking in $44.13 billion in revenue versus the $43.68 billion that was estimated. The earnings were announced as the automaker continues to negotiate with the United Auto Workers to end its strike, which is now in its sixth week. GM said the strike was costing it roughly $200 million a week in lost vehicle production.
Delaying production of the Chevy Equinox and Silverado EVs, as well as the premium Sierra Denali EV pickup truck, is the latest to embroil North America’s largest automaker, which has set a goal to only electric vehicles in the US after 2035. Today, GM’s chief financial officer, Paul Jacobson, described the transition to EVs over the next decade as “choppy” and said that internal combustion engine vehicles
Previously, GM dealt with a slower-than-expected ramp-up for its new Ultium-powered electric vehicles, including the GMC Hummer EV and Cadillac Lyriq. That included problems with the battery supply chain that forced the company to reduce some of its production targets. And last week, GM said it was pushing EV truck production at its Orion facility, which was supposed to start next year, until late 2025.