GM’s Electric Vehicle Production Falls Short in 2023
General Motors Co. fell significantly short of its ambitious 2023 electric vehicle (EV) production target, reaching only 75,000 units. The initial goal was to produce 150,000 EVs, half of which were intended to feature the innovative Ultium battery pack. However, the company faced substantial challenges.
Missed Targets and Model Distribution
The bulk of GM’s 2023 EV sales comprised the Chevrolet Bolt compact and the slightly larger Bolt EUV, both priced lower and not utilizing Ultium batteries. These models are slated for discontinuation in their current form. On the contrary, Ultium-powered vehicles, including the Cadillac Lyriq, Chevy Blazer SUV, Silverado pickup, and Hummer EV, accounted for a mere 14,000 of GM’s total EV sales.
Persistent Production Woes
GM grappled with persistent issues in the automation process responsible for assembling Ultium battery cells into packs. This setback significantly delayed the ramp-up of production.
Addressing Manufacturing Challenges and Tax Credit Qualification
GM anticipates resolving these manufacturing challenges in the first half of the year. Simultaneously, the automaker aims to alter the sourcing of two EV parts to ensure that the Blazer and Lyriq meet the requirements for the full $7,500 EV tax credit under Joe Biden’s Inflation Reduction Act.
Tax Credit Hurdles and Customer Incentives
Treasury Department regulations currently prevent tax credits for vehicles using battery components from companies under Chinese jurisdiction or with at least 25% ownership by the Chinese government. Until the Blazer and Lyriq qualify for the tax credit, GM plans to offer customers incentives equivalent to that amount.
Competitive Landscape: Ford’s Response
In response to the industry challenges, rival Ford Motor Co. is offering $7,500 lease incentives for the 2023 Mustang Mach-E, a notable increase from the $3,750 tax credit it qualified for last year. Ford has also adjusted pricing for the high-end Platinum edition of its F-150 Lightning electric pickup, lowering it by up to $7,000 while increasing the base model price by up to $10,000. Despite these moves, Ford remains cautious about the sales outlook, recently reducing its 2024 production goals for the electric truck by half.