After releasing Q3 earnings Tuesday, GM says it will delay the Equinox EV, Silverado EV, and GMC Sierra EV production to “protect” pricing and enhance profitability.
GM delays Equinox, EV truck production in Q3
General Motors announced plans to delay Silverado EV and GMC Sierra EV production at its Orion assembly plant in Michigan last week.
The move comes as the automaker aims “to better manage capital investment while aligning with evolving EV demand,” according to GM spokesperson Kevin Kelley.
GM reiterated its intentions Tuesday. Following its Q3 earnings, GM’s CEO Mary Barra explained the company is “moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements.”
Barra said the adjustments “will make our vehicles less expensive to produce, and more profitable” in the future.
GM’s leader explained on the company’s earnings call that the EV delays will impact Ultum-based models, including the Equinox EV, Silverado EV RST, and GMC Sierra EV. Although no specifics were mentioned, Barra said it would be “a few months.”
Ultium-based EV production finally picked up in the third quarter. GM produced 32,000 EVs in Q3, up 23% compared to last quarter as supply chain hurdles eased.
In Q4, GM expects 2/3 of EV production to consist of the Cadillac Lyriq, Chevy Blazer EV, Chevy Silverado EV (Work Truck edition), and GMC Hummer EV.
Ultium-based Bolt EV to improve profitability
Barra explained the next-gen Bolt will be “an even better EV” with engineering and manufacturing enhancements.
The Ultium-based Bolt EV will be the first to receive LFP batteries, which will help lower costs, making the vehicle more affordable for buyers.
The company has yet to provide a release date but says the improvements will lead to improved profitability.
By delaying the Equinox, Silverado, and GMC Sierra EVs, GM says it will have the opportunity to implement manufacturing improvements, among other adjustments, “that will make our vehicles less expensive to produce, and more profitable.”
The automaker says the delay comes as GM looks to “protect profitability rather than volume.” By mid-2024, GM expects no constraints and will be able to build to order.
GM also withdrew its full-year metrics following the UAW strike. The company says once new contracts are signed, they will have more clarity around financials due to uncertain labor costs.
Overall, GM’s revenue was up 5.4% YOY to $44 billion on higher-margin pickup and SUV sales. The company was profitable in every region, including China.
However, GM’s net income margin slipped from 7.9% last year to 6.9% in Q3 on rising costs. Net income fell from $3.3 billion last year to $3.1 billion in Q3.
Although GM chose not to disclose EV margins, the company is still aiming to achieve double-digit profit margins on its EVs by 2025. The automaker looks to build 1 million EVs in North America by then.