Car Expert Confident on Tesla $25000 EV as GM Cancels its $25000 EV

Not all $25,000 electric cars are equal. Many car analysts believe that Tesla must have a $25,000 electric car to reach mass volumes of an extra 4 million or more vehicles on top of 2 million or more Model Y and Model 3 cars.

Car Expert Cory Steuben did some physical calculations for the minimum range and scaled-down cost of standard range Model Y. His team determined that a simple scaled-down compact version of the Tesla Model Y would have 254 miles of range and a starting cost with 20% margin of $25000. Cory has a 100-person company that does vehicle teardowns and cost estimates from the components on up. This factors in the smaller vehicle size, smaller battery pack and various other simple assumptions for the compact car. He feels this will be a $25,000 car that people will want to drive and own instead of an uninspiring car like the Chevy Bolt EV.

GM has just canceled the Chevy Bolt EV which it was making from 2016-2023.

The Chevy Bolt EV sold 21,630 units in Q1 2023. This is despite MSRP selling prices starting at $26,000. The total number of Chevy Bolts sold over eight years is about 200,000. Tesla sold more Model Ys in Q1 2023 than the eight-year cumulative sales history of the Bolt. The Tesla Model Y sells for about twice the price of the Chevy Bolt EV. It is the belief of many car analysts that cheaper EVs will have higher sales volume.

The GM Chevy Bolt also had a major safety problem where all of the Bolts made from 2016 to 2021 were recalled for a battery fire risk.

BYD and some chinese electric car makers have unit sales of over a million for their $25000 price range EV car models. Those are 95%+ sales in China where there are lower regulatory standards. This means the electric cars can be made more cheaply to lower safety standards. The exported versions of those China low price EVs have far higher foreign prices. Prices can some times double when those China EVs go to Australia or Europe.

In the recent quarterly earnings call, GM estimates EV gross revenue of $50-billion-plus in 2025 and total gross revenue of at least $225 billion. They expect low to mid-single digit (2-6%?) earnings before income taxes-profit margin that year. GM battery cell cost is expected to be below $87 per kilowatt hour. GM CEO Mary Barra reiterated GM’s plan to produce 400,000 EVs between last year and the first half of 2024, and to have capacity for 1 million EVs in North America by 2025..

In 2022, General Motors delivered 39,096 all-electric vehicles in the US (up 57% year-over-year). That’s 1.7% of GM’s total volume and the best year ever for BEVs.

GM target in North America is 50,000 EVs produced in the first half of the year and double that in the second half of the year, which indicates 150,000 in total.