Consumers Are Willing To Pay Extra For EVs But GM Won't Exploit That

Pricing / 10 Comments

GM is determined to price EVs at the level of ICE cars.

General Motors has said that it will be making every effort to keep EV prices reasonable while protecting existing reservation holders from price increases as it strives to attain price parity with ICE vehicles. As the automaker prepares to launch several new EVs based on its Ultium platform, it believes that attractive pricing is the key to keeping buyers happy.

GM already admitted earlier this month that its EVs will only become profitable in 2025, so the company seems prepared for the long haul as it gradually scales EV production and seeks to dethrone Tesla. President Mark Reuss made the comments about the importance of pricing at the company's investor day, which took place in New York.

2022-2023 Chevrolet Bolt EV Driving Front Angle Chevrolet

Although GM admits that many EV buyers are willing to pay a premium over ICE cars, that isn't something it is trying to exploit. "Are we baking that [premium] in on every single product and every segment and taking advantage of that? The answer is no," said Reuss.

Reuss elaborated by saying that it's GM's job to offer "really good vehicles at appropriate segment pricing that doesn't cost anybody any more money than what they were paying to go into an ICE segment."

Right now, the Chevrolet Bolt is one of GM's few affordable EVs and starts at just $25,600. That is tremendous value, and the upcoming Equinox EV promises to undercut many rivals in the compact crossover segment.

2024 Chevrolet Equinox EV Driving Front Angle Chevrolet
2024 Chevrolet Equinox EV Charge Port Chevrolet

GM is also paying close attention to reservation holders, acknowledging that from the time a reservation is placed to the time a car arrives, a lot can happen. Production costs can spiral out of control, leaving some automakers with no choice but to raise the price of vehicles already reserved.

"We weren't going to make the mistake that others have, where we're going to go and have to change prices on somebody who's already ordered a vehicle," said CFO Paul Jacobson.

Jacobson was likely referring to Rivian, which slapped its R1T and R1S with 20% price increases in March for those who had placed orders. Customers retaliated en masse, and Rivian was forced to reverse the decision or risk fueling an even bigger PR disaster. Another infamous example is Tesla with its Cybertruck; this electric pickup has raked in 1.5 million pre-orders but will not be as cheap as initially promised.

Rear Angle View Cadillac

By contrast, GM has been careful to avoid the same scenario. It only took reservations for one model year of the Cadillac Lyriq, even though the demand existed for more. That's because GM was unable to predict the cost of building 2024 Lyriqs, which risked customers being hit with a price increase before their vehicles even arrived.

Jacobson said that GM didn't want to put itself "in a position where we're exposing the customer to our incapability to manage the production costs of our business."

This focus on reasonable pricing practices may not do much for GM profits right now, but it'll surely give consumers another reason to go knocking on the doors of their Chevrolet and Cadillac dealers.

2024 Chevrolet Blazer EV Front View Chevrolet
2024 Chevrolet Blazer EV Charge Port Chevrolet
Source Credits: Automotive News

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