Featured Corvette to Launch as a Brand in 2025 with a Four-Door and an SUV

Corvette to Launch as a Brand in 2025 with a Four-Door and an SUV

The headline covers most of the content. What it doesn't, and why I posted it in this forum, is that those new Vette models will be EVs.

 

They have been in production and available before this move. When was the last time the US had a Crown?

The Corvette has been separate from Chevy in the public conscious for years now. The S-10 SS from the '90s was an attempt at a Chevy performance halo car, because people had stopped linking Corvette with Chevy. GM is just making the split official.

A hybrid and BEV Corvette were already confirmed. The four door and crossover is news. The Mustang could be inspiration, but Porsche had success with this path first.

 

To get the latter requires a parts supply base that can support the production of the large numbers. Since there is a delay between investing in that supply base and it producing, might has well make the most profit on making the former.

Anyway, GM's investment into EVs and batteries isn't as lacking as some others. The Bolts should be in production for another 3 years at least, and the Equinox EV coming out for 2024 has a target starting price of around $30k. It isn't like GM lacks an affordable EV in their line up; they actually started there. The issue for building large numbers goes back to current parts supply levels.

https://www.freep.com/story/money/cars/general-motors/2021/06/16/gm-battery-plants/5293394001/
GM Plans Biggest Manufacturing Investment Ever In Its Home State For EV, Battery Production
General Motors strikes a deal to source lithium in the US for its electric car batteries - The Verge
https://electrek.co/2022/09/22/gm-investing-in-lithion-recycling-to-support-ev-battery-recycling/

 

"And battery costs have come down, but not as fast as GM would have liked. A 2016 report from Bloomberg said that GM was losing between $8,000 and $9,000 per Bolt sold. A 2017 teardown by UBS found that the number was probably closer to $4,000 or $5,000, but either way, GM was losing money on each Bolt that left the dealer’s lot."

Those reports are based on the gen1. The Bloomberg one is behind a subscription wall. It could very well be a report on a study by UBS or Munro. The UBS report isn't saying what that article says. The $4k to $5k figure is how much lower the teardown down cost findings were compared to an earlier estimate they made.

https://neo.ubs.com/shared/d1mFW2YvNRvHXA/ (a pdf)
"On our analysis, the total direct production costs of the "naked" Bolt add up to
$28.7k, as the following analysis shows. This implies a positive contribution (selling
price less cash manufacturing costs) of $3.2k per vehicle sold. The contribution
represents 10% of the vehicle price (excl. dealer mark-up). Hence, GM has an
incentive to sell more vehicles. At EBIT level, however, including proportionate
overhead costs and D&A, GM likely incurs a loss of $7.4k per vehicle sold."
https://neo.ubs.com/shared/d1mFW2YvNRvHXA/#%5B%7B%22num%22%3A320%2C%22gen%22%3A0%7D%2C%7B%22name%22%3A%22XYZ%22%7D%2C43%2C770%2C0%5D (subsection where the quote is from)

The gen1 Bolt was priced higher than it cost to make. It was overhead and other factors that incurred the loss(the technical terms are finance ones for those wanting to look deeper). In the intro of the report, UBS hints that those costs could have dropped with higher production. They also had projections for the gen2, "On a 2025 view, the "next-gen" Bolt's total costs (down to EBIT level) should
decrease by $13.2k." Of course, they couldn't factor in recent history, but the past prediction was a $7k loss on the Bolt going to a $6k profit. IIRC, statements from Toyota were that the Prius was profitable until the midcycle of the gen2.

As for GM admitting losing money on the Bolt, that all seems to be based upon this, "During a discussion with industry analysts as part of the company’s reporting of its latest quarterly financial results, Mary Barra said that it doesn’t expect its all-electric models to start turning a profit before the start of the next decade, at the earliest.

"We've talked about the fact that with our next generation of development, we want to make sure we have obtainable, profitable, desirable, and with the appropriate range."

- Mary Barra" - GM's Barra admits the Chevrolet Bolt is not profitable | Car News | Auto123

The Bolt was never named. GM has more than one plug in, including models not available in the US. They've also invested a lot of cash into Ultium and the new BEV platforms. Accounting will want that paid off before counting revenue from the car sales and profit.

PS: didn't have a tear down, but the UBS report also analyzes the Model 3.

 

Toyota was operating the same way with EVs, but have now assembled a crisis management group to salvage what they can in face of a market shifting faster than they wished.

GM has already started the cash burning. The EV Vette isn't their Model S though. The Hummer EV, Lyriq, Blazer EV, Silverado/Sierra EV, and maybe the Equinox EV out before it. Then the 4 door and crossover Corvette models will follow.