GM EV Clowns

Tesla haters have been saying for years that serious electric car competition was coming. In 2017, Business Insider write “We just drove the all-electric Chevy Bolt — and Tesla is officially in trouble”. General Motors considers itself the Dream Team: the car company that symbolizes US manufacturing might. The Chevy Bolt won the Car and Driver car of the year in 2017. The GM Chevy Bolt was the best-selling non-Tesla electric car for the last five years. It turns out GM is the laughable EV competition.

Now in 2021, GM has had to recall every Bolt ever made. They are recalling 142,000 Bolts to replace all of the batteries. Average car recalls over the past ten years involve $500 per car in repairs. This will cost $12,600 per car. The total cost will be $1.8 billion. GM has stopped the GM Bolt production line and will not restart until they are certain the LG batteries are good and fixed.

Even before this recall hit, GM had admitted in 2019 that the Bolt was never profitable. A 2016 report from Bloomberg said that GM was losing between $8,000 and $9,000 per Bolt sold. A 2017 teardown by UBS found that the number was probably closer to $4,000 or $5,000. GM was losing money on each Bolt that left the dealer’s lot. GM CEO Mary Barra said in a quarterly report in 2019 that GM did not expect to be profitable with EVs until about 2030. The recall means that GM has lost $17000-19000 for every Bolt.

To fix the battery fire problem, GM will replace the vehicles’ batteries which is the heart of EVs. Until the batteries are replaced, GM has recommended that Bolt owners park their vehicles outside and limit their battery’s state of charge to 90 percent or lower and do not let the estimated range dip below 70 miles. GM says it is working with LG Chem to ramp up production of the replacement cells.

All Hyundai Kona’s have also been recalled. Hyundai Kona (4200 sold Jan-July)was the 11th best-selling EV model in the US in 2021. Hyundai is recalling about 80,000 Kona’s worldwide and it will cost them about $900 million. The GM Bolt (20288 sold Jan-July) was the 3rd best-selling EV model in the US in 2021. The best-selling is the Tesla Model 3 (71600 sold Jan-July) and the Tesla Model Y (51,500 sold Jan-July). the Tesla Model X (6200) and Model S (5500) were still the 8th and 10th best-selling EVs in 2021 despite having production lines down for refresh most of the year. There were only 33,000 EVs sold in the US in Jan-July 2021 that were not recalled and were not Tesla EVs. This gives Tesla 80% US market for non-recalled EVs.

In 2020, GM’s Bolt was the third best-selling EV in the USA. Tesla had the other top 5 spots with the Model 3, Model Y, Model S and Model X. Hyundia Kona was ninth. The six top ten US EVs were not Tesla cars for 2020, there are only four top ten 2020 US EV models that are not Teslas and are not recalled.

GM and Hyundai will be stopped for 1-2 years fixing these old EVs. I think GM will not be rolling out new EVs in large numbers until they get their Ultium factory produces in perhaps 2022. LG Chem is also a partner for GM with the new Ultium battery factories.

GM made a bad choice for another strategic partnership. General Motors picked Nikola Motors as a strategic partner for electric trucks. Nikola and its CEO were involved in a massive fraud and GM did not figure out that Nikola was a fraud.

SOURCES -CNBC, GM, Nikola Motor, Business Insider
Written by Brian Wang, (Brian owns shares of Tesla)

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