GM slashes price of its electric cars by US$6,000 to stay in the race

Highlights:

• General Motors (NYSE: GM) slashed the price of its EV models Chevrolet Bolt hatchback and Bolt EUV by about US$6000.
• Bolt EUV was sold for US$33,500 prior to the price cut.
• General Motors (NYSE: GM) had to recall 142,000 Bolts a year ago over safety concerns.

General Motors (NYSE: GM) has slashed the price of its electric vehicle models Chevrolet Bolt hatchback and Bolt EUV by about US$6000, surprising everyone. It has come when the demand is high and supplies scant, allowing dealers to charge thousands of dollars above sticker.

The demand is so high that consumers wait for weeks and months to take their delivery.  

Bolt EUV (electric utility vehicle) was sold for US$33,500 prior to the price cut.

General Motors started to build these vehicles in April after being forced to halt assembly for nine months to work on a safety issue found in these models. GM had to recall about 142,000 Bolts over a safety concern with their batteries catching fire.

However, it is difficult to restock dealers and create a good sense of demand in just months.

Also Read: BYD executive says it will supply batteries to Tesla 'very soon'

© Jetcityimage | Megapixl.com

Also Read: Musk off-loads US$4 bn Tesla (TSLA) stocks after Twitter (TWTR) deal

GM faces fierce competition from rivals Ford, Tesla

As GM tries to grab a bigger share of the electric vehicle market, the competition it faces along the way is enormous. It ramps up production of its top-dollar EV models. Last year, Ford outpaced GM in EV sales after its Mustang Mach-E carrying the Blue Oval occupied the second spot after Tesla.

Ford is also rolling out the F-150 Lightning pickup, while GM will be countering with the GMC Hummer truck and Cadillac Lyriq SUV.

In 2023, Barra is all set to launch the electric versions of the Chevy Silverado pickup and Equinox and Blazer SUVs.

For GM, it is uphill to depend on the Bolt hatchback and EUV for volume. Consumers usually prefer big pickups and SUVs. Both these vehicles run on GM’s old-gen batteries rather than its Ultium packs. Although Chevy kickstarted an advertising campaign in April when the production resumed.

Bottom line:

For GM to stay in the EV race in the US while scaling production of Ultium-based vehicles, it has no other option but to bring Bolt prices down.