U.S. automobile manufacturer General Motors (GM) has delayed the operation of its electric truck production plant in Michigan by one year. As sales of electric vehicles slowed down this year, it seems to have started to adjust the pace of investment.
The Wall Street Journal (WSJ) reported on the 17th (local time) that GM has postponed its plan to produce Chevrolet Silverado and GMC Sierra electric vehicle models in Orion, a suburb of Detroit, to the end of 2025, a year later than originally planned.
GM explained, “We need to manage cash efficiently as demand for electric vehicles changes.” He then said the decision was not related to the UAW strike. UAW has been on strike for five weeks against Ford, GM and Stellantis, the top three U.S. automakers.
GM’s decision to postpone the operation of the plant is the aftermath of the recent slowdown in sales growth of electric vehicles. From January to September this year, sales of electric vehicles increased by 51% compared to the previous year. It is higher than the increase in overall automobile sales (14%). However, the sales growth rate of electric vehicles fell short of 69 percent during the same period last year.
In addition, the average sales price of electric vehicles fell in the aftermath of Tesla’s price cut. According to Cox Automotive, an automotive industry research firm, the average price of electric vehicles purchased by consumers fell from $59,000 in January to $48,000 in September.
Companies other than GM have also started to adjust the speed of their electric vehicle-related businesses. Ford originally set a goal to produce 600,000 electric vehicles annually by the end of 2024, but pushed it back to the second half of next year. The WSJ reported last week that Ford is reducing shifts at its “F-150 Lightning” production plant, an electric vehicle pickup truck.
Third-quarter earnings released by Lucid, a U.S. electric vehicle start-up, also short of market expectations. Lucid produced 1,550 electric vehicles in the third quarter, of which it delivered 1457. Deliveries in the third quarter of last year (1,398) and in the second quarter of this year (1,404). However, it fell short of market expectations (2,000 units). WSJ said, “It is questionable whether Lucid will be able to achieve its goal of producing 10,000 units this year.” Lucid shares fell about 5% on the day, and have fallen about 80% since going public in 2021.
TED PARK
US ASIA JOURNAL
