GM selling Bolt EV at a loss before ZEV credit?

[BluestarE3]

Report: GM will lose ~$9,000 for every Chevy Bolt EV it sells before ZEV credit

If true, this may be one of the reasons it's being sold initially only in California and Oregon.

 

[Barklikeadog]

Compliance car of the year? funny stuff

 

[Jeff N]

The Electrek article, which links to an article in the Detroit News which was really taken from Bloomberg which quotes an "auto analyst", does not provide any of the key assumptions underlying this alleged loss.

Is this "up to" $9,000 loss just based on the incremental manufacturing and sales cost for each additional car sold, or is it predicated on including amortized costs for R&D and factory tooling? If it includes amortization, then over how many years and how many assumed cars?

Does selling each additional car increase or decrease the overall loss?

If losses are only being subsidized by CARB state ZEV credits, then why has GM announced that they are selling the 2017 model year Bolt in all 50 states plus Canada and as the Opel Ampera-e in most of Europe?

None of that background is provided so it's just meaningless FUD.

 

[scaesare]

The Electrek article, which links to an article in the Detroit News which was really taken from Bloomberg which quotes an "auto analyst", does not provide any of the key assumptions underlying this alleged loss.

While I agree the underlying data isn't presented, I'll point out the article does say that Electrek talked to sources first hand to get information, which was then cooperated by the Detroit News article:

Electrek talked off-the-record with a few people familiar with the Bolt EV program, and the figure of $10,000 was thrown around as the anticipated average loss per vehicle before incentive. Now Detroit News is corroborating today...

That having been said, initial selling at a loss and/or counting on ZEV credits to get your foot in the door while battery prices come down isn't necessarily a bad thing.

 

[dauger]

The aforementioned Bloomberg article:
Why There's an Electric-Car Boom in the U.S.

$9k/Bolt loss certainly would explain why GM ditched its plans for nationwide release in favor of a "slow" rollout solely in ZEV states to no more than 30k in 2017.

 

[miimura]

If GM can sell every Bolt EV they have planned to make in just the CARB participating states, then there is absolutely no reason to sell them in other states until the demand dramatically softens in those states. Selling a Bolt EV without getting the ZEV credits significantly extends their break-even point for the product.

Anybody that really wants a Bolt EV should just go to California and buy one. Shipping a car across the country only costs about $800. However, be prepared for shenanigans if you want to lease it but not register it in California. For example, VW will not lease you an e-Golf if you don't live in a CARB state. You can buy it with your own financing, but they definitely won't pass through the $7,500 tax credit on the lease if you don't live in a CARB state. Watch out for the California sales tax too. You have to have the car picked up from the dealer by a motor carrier for delivery out of state if you don't want to pay the 7.5%-10% sales tax in California.

 

[Jeff N]

The aforementioned Bloomberg article:
Why There's an Electric-Car Boom in the U.S.

$9k/Bolt loss certainly would explain why GM ditched its plans for nationwide release in favor of a "slow" rollout solely in ZEV states to no more than 30k in 2017.

That's not what GM is doing.

The 2017 Bolt EV is still a 50 state plus Canada, South Korea and most of Europe car, according to every credible source I've seen. Expansion beyond CA and OR is said to begin by March of next year. Nothing in that article says otherwise. In fact, it says the Bolt will also be sold in China which is news to me but not surprising.

 

[Jeff N]

While I agree the underlying data isn't presented, I'll point out the article does say that Electrek talked to sources first hand to get information, which was then cooperated by the Detroit News article

If Electrek has their own sources then they should report the assumptions underlying the loss claim being causually tossed around. But they didn't.

 

[ItsNotAboutTheMoney]

The aforementioned Bloomberg article:
Why There's an Electric-Car Boom in the U.S.

$9k/Bolt loss certainly would explain why GM ditched its plans for nationwide release in favor of a "slow" rollout solely in ZEV states to no more than 30k in 2017.

As Jeff noted, they're going to be selling in other places. It goes to CA/they're selling first in CA

 

[EinSV]

Given the multiple sources cited by Electrek and Bloomberg and the specificity of the information, this appears to be a planned leak by GM. In addition, if the information were incorrect and/or GM wanted to correct it it easily could.

GM is trying to play both ends of the game -- making the Bolt as a compliance vehicle in low volumes, and at the same time lobbying to weaken the ZEV credit system and stave off further regulation that could force it to produce EVs in high volume.

Leaking this information rather than complaining about it publicly provides GM's supporters ammunition to continue to claim (incorrectly) that EVs are money losers, while GM itself tries to get a little green street cred from selling the Bolt and hopefully burnish its image a bit with younger and more environmentally conscious car buyers.

For its own good, I would hope that at some point soon GM decides to make the large, long-term investment that is necessary to develop a profitable, high volume EV program. Unfortunately, since that will likely require sacrificing short-term profits for the long-term, something public companies have a hard time doing, I don't expect it anytime soon. EV mandates from China and Europe and EV competition from China may eventually force GM's hand if Tesla doesn't.

 

[scaesare]

If Electrek has their own sources then they should report the assumptions underlying the loss claim being causually tossed around. But they didn't.

As I said, "I agree the underlying data isn't presented...", and certainly you can argue it should be.

I'm simply pointing out that the Eletrek article doesn't appear to be solely based on 3rd-hand sources. So, to the extent you find Eletrek reliable, you can judge what to make of the conclusion they present...

 

[McRat]

Compliance car of the year? funny stuff

Not even sure it gets a nomination when you compare what's for sale. Toyota get the hardware for the CC of 2017. Engineered from the ground up to burn gasoline in the HOV lane.

Toyota made a PHEV with 11 miles of range if you drove like a golf cart. It failed. Toyota talked CARB into stopping HOV sticker for PHEV's since the the PiP was a bloodbath. And CARB was bumping the EV range to 20 miles. When Toyota got a car to operate at partial throttle for 25mi in perfect conditions at low speeds and acceleration, the HOV stickers returned.

Toyota will make the absolute minimum effort to get CARB off their back.

Compare the 2017 Prius Prime to the Bolt and tell me which one was only aimed at the lowest possible level for CARB Compliance.

But the Prius is the Gold Standard of the Save The Whales Movement. Yes, it is about the dirtiest HOV car again, but fashion overrides facts when it comes to the Green Zealots.

 

[gene]

But the Prius is the Gold Standard of the Save The Whales Movement. .

But the Prius WAS the Gold Standard of the Save The Whales Movement.

 

[Jeff N]

As I said, "I agree the underlying data isn't presented...", and certainly you can argue it should be.

I'm simply pointing out that the Eletrek article doesn't appear to be solely based on 3rd-hand sources. So, to the extent you find Eletrek reliable, you can judge what to make of the conclusion they present...

My main problem with this story, including Electrek's version of it, is that I don't know what the heck they are saying. Just saying something like "$9,000 loss per car" is pretty meaningless and is therefore FUD.

This objection really has nothing to do with whether they are talking about the Bolt EV or the Model 3. I would find the story objectionable if it were about Tesla.

 

[green1]

But the Prius WAS the Gold Standard of the Save The Whales Movement.

Not because it was ever any good, but because nobody else was really bothering to do anything at all when it first appeared.

 

[apacheguy]

Elon says that Tesla get precious little in the way of ZEV credits. No reason to think that GM would be able to recoup any losses.

Musk Tears Into California Board Over Emission Credits Rules

 

[3Victoria]

Elon says that Tesla get precious little in the way of ZEV credits. No reason to think that GM would be able to recoup any losses.

Musk Tears Into California Board Over Emission Credits Rules

I am not sure how to interpret these stories. However GM receives full benefit from ZEV credits as they apply them directly to their ICE vehicle production. Tesla cannot do that, since they do not produce ICE vehicles, but have sell them to ICE producers. Presently they can do that for half-price, but may not be able to sell any ... at which point they get no benefit. Rather an uneven playing field.

 

[green1]

I am not sure how to interpret these stories. However GM receives full benefit from ZEV credits as they apply them directly to their ICE vehicle production. Tesla cannot do that, since they do not produce ICE vehicles, but have sell them to ICE producers. Presently they can do that for half-price, but may not be able to sell any ... at which point they get no benefit. Rather an uneven playing field.

It's not really "uneven" so much as the way it's designed. the credits were never supposed to encourage new players to build EVs (there are different government programs for that). The credits were supposed to convince existing players to convert their fleet. The ability to sell credits was a side-note with the idea that some manufacturers might be a bit ahead or behind and the industry could even it out amongst themselves, it wasn't supposed to be so a complete newcomer could make a fortune selling credits to the existing manufacturers.

 

[sandpiper]

Compliance car of the year? funny stuff

There's some debate to be had about whether this is a "compliance car" or not. But so bloody what? The intent of the law is to force compliance, and so this is what happens. Otherwise reluctant manufacturers put out plausibly good EVs in order to comply. I'm not sure why there is negative press.

It would be like griping that "speed compliant" drivers are only slowing down because they don't want tickets, but would otherwise be going faster. Yes... but so what?! That's the intent of the law and the tickets: to force compliance.

It will mean that the automakers start building reasonable EVs and getting them onto the market. And that should both slowly encourage adoption, improve the technology and reduce the cost. That GM has this on the market as a "compliance" vehicle should be celebrated.

Sheesh.

 

[green1]

The issue is that manufacturers do the absolute minimum to meet the compliance, intentionally cripple their offerings so that they don't sell well, and they lobby the government to remove the rules with the line of "see, we tried and nobody wanted it!" when in fact they didn't actually try, they just made a show of doing so.

In your speed example it's the guy who drives at 200kph with a radar detector and his buddy is a cop who gets him out of any tickets he still gets... Sure the law is sort of helping to slow him down sometimes, but it's pretty clear he's doing everything he possibly can to avoid abiding by it.