Disappointing Electric Vehicle Sales... GM Delays Michigan Plant Operation by One Year

American automaker General Motors (GM) has postponed the start of operations at its electric vehicle production plant in Michigan by one year. This move is seen as a form of investment pace adjustment following electric vehicle sales falling short of expectations this year.

[Image source=Reuters Yonhap News]

The Wall Street Journal (WSJ) reported on the 17th (local time) that GM has changed its plan to produce Chevrolet Silverado and GMC Sierra electric vehicle models in Orion, a suburb of Detroit, from the original schedule to the end of 2025, one year later than initially planned.

GM explained that the decision was made "to efficiently manage cash in response to changes in demand" and stated that it is not related to the strike by the United Auto Workers (UAW). The UAW has been on strike for five weeks against the three major U.S. automakers: Ford, GM, and Stellantis.

This is analyzed as a consequence of the recent slowdown in the growth rate of electric vehicle sales. From the beginning of this year through September, electric vehicle sales increased by 51% year-over-year, far exceeding the overall vehicle sales growth of 14%. However, this is significantly lower than the 69% increase in electric vehicle sales during the same period last year. Additionally, due to factors such as Tesla’s price cuts, the average selling price is also trending downward. According to Cox Automotive, the average price of electric vehicles purchased by consumers dropped from $59,000 in January to $48,000 in September. WSJ reported that "electric vehicle momentum is slowing" and that "despite price reductions, inventory is increasing for some electric vehicles."

GM is not the only company adjusting its pace. Ford has postponed its goal of producing 600,000 electric vehicles annually from the end of this year to the second half of next year. John Lawler, Ford’s Chief Financial Officer (CFO), said at a conference last month that "the growth rate of electric vehicle sales is not accelerating as expected." WSJ also reported last week that Ford is reducing shift work at its F-150 Lightning electric pickup truck production plant.

On the same day, U.S. electric vehicle maker Lucid revealed third-quarter vehicle delivery results that fell short of market expectations. Lucid delivered 1,457 vehicles in the third quarter. This is a slight increase compared to 1,398 vehicles delivered in the third quarter of last year and 1,404 vehicles in the second quarter of this year, but it is far below the average analyst estimate of 2,000 vehicles compiled by FactSet. Lucid’s electric vehicle production in the third quarter was recorded at 1,550 units. WSJ added that these results raise doubts about whether Lucid can achieve its production target of 10,000 vehicles this year.

In Tesla’s case, while vehicle delivery volumes are increasing, the growth rate across its lineup is slowing despite aggressive price cuts. Tesla is scheduled to release its third-quarter earnings after the market closes on Wednesday, the 18th.

This content was produced with the assistance of AI translation services.