General Motors Co. (NYSE: GM) has been in the race to be a leader in the electric vehicle (EV) market for years. The hugely unpopular Chevy Bolt was released in 2016. Recalls and a lack of interest in EVs from any company other than Tesla helped make the Bolt an also-ran from the first days buyers could buy one. Bolt sales have barely reached 20,000 in the United States in most years since it became available.
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GM’s bright EV future has been predicted more than once by the management of America’s largest car company. Last year, GM CEO Mary Barra said its firm would be all-electric by 2035. That does not address the issue of what GM will do if EV adoption is slow, gas is cheap and Americans continue to demand gasoline-powered cars. Whatever the future may bring, GM will spend billions of dollars to make sure Barra’s statement comes true.
GM has to contend with the dozens of new EVs that will be launched by every global manufacturer in the business, as well as most of the small ones. Each point of market share will come dearly.
Enter the Chevy Equinox, a small electric SUV that will cost only $30,000. That is below the average price of a new car in the United States. One reason GM will use the Equinox brand is that the gas-powered version is among GM’s better-selling models. The new Equinox will go 300 miles on a charge, which is impressive.
Selling a cheap EV is harder than it looks. The sharp increase in the components of EV engines have driven Ford to increase the price of its two EV flagships. The promise that Ford can tap the huge market of F-Series pickups with its new Ford F-150 Lightning may hit a wall as it just pumped the manufacturer’s suggested retail price by over $7,000. The sold-out Mustang Mach-E’s price will rise nearly as much. This means car companies will either need EVs to be loss leaders or settle on a smaller than expected target market.
The Equinox will not just be a test of whether GM can launch another EV with fanfare. It also may test whether there is an exploding market for EVs and whether car companies can afford to make them.
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