General Motors Vows To Avoid “Opportunistic” EV Prices
At the General Motors Investors Day event earlier this month, GM president Mark Reuss told those in attendance that the company wants to avoid “opportunistic” pricing of its upcoming electric vehicles, several of which are scheduled to appear in showrooms next year. Instead, according to Automotive News (paywall), GM is thinking more of building a long term relationship with its future electric vehicle customers with an assortment of models that spans all price points.
This is in keeping with the original concept for General Motors when it was formed by William Durant in 1908. Chevrolet was always going to be the value brand. Pontiac, Oldsmobile, and Buick were intended to be stepping stones toward the dream of someday owning a Cadillac.
Inside EVs reports that Reuss told investors the company does not want to turn off prospective buyers by pricing its EVs too high. While research shows that consumers are willing to pay a premium for EVs — at least for now — GM will target prices that are similar to the conventional vehicles it sells.
Reuss said GM’s job is 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. It’s our job to deliver the commercial value, to be able to do that at margins that were similar — or in some cases above — what we did on an ICE vehicle. Being opportunistic or episodic with pricing is not what we’re doing here. We’re in the long game, and we’re going to create customers for life.”
During the same presentation, CFO Paul Jacobson told investors the automaker will also keep an eye on reservations to avoid having to raise prices on consumers waiting in line. This explains why the company only collected reservations for one model year of the Cadillac Lyriq, even though demand existed for more. It couldn’t predict the cost to build a 2024 model year vehicle.
“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. We’d rather take the risk that the orders dry up or customers suddenly run away from EV transformation rather than put ourselves in a position where we’re exposing the customer to our incapability to manage the production costs of the business,” Jacobson said.
He is probably talking about Rivian and Ford, both of which have announced substantial price increase that will apply to vehicles that have already been ordered, leaving a bad taste in the mouths of many who are waiting for their long awaited electric cars and trucks to arrive.
General Motors Twitter Blackout Continues
Shortly after Elon Musk completed his purchase of Twitter in late October, General Motors announced it was pausing paid advertising on the social media platform while it evaluated Twitter’s new direction. Bloomberg has surveyed the activity by the various GM brands and CEO Mary Barra since then and found nothing has been posted by them on Twitter since October 27, although they continue to respond to questions from customers.
Inside EVs says this hints at a company-wide policy and shows that GM’s retreat from Twitter was more comprehensive than indicated when it paused advertising last month. Automotive News contacted the automaker, which replied that it is concerned about the platform’s new ownership.
“With a competitor owning the platform, it’s important for us to ensure our advertising strategies and data can be safely managed,” GM said via email, adding the company sees Twitter as “just one of many channels available” to share information and will “choose the channels and platforms that can be most effective at any point in time.”
The company also noted that it would engage as necessary with customers; it didn’t address Mary Barra’s absence from Twitter, though. Other GM top execs appear to have neglected their Twitter accounts in recent weeks as well. Duncan Aldred, Global VP Buick & GMC, last tweeted on September 1, while GM President Mark Reuss’s account is now blank, even though he used to be quite active.
BrightDrop and Cruise have continued to tweet, as have their CEOs, Travis Katz and Kyle Vogt. Cruise spokesman Aaron McLear told Bloomberg the company finds Twitter to be an effective away to communicate with users and people in the tech community.
Other major automakers and industry leaders are still tweeting, including Ford and its CEO Jim Farley, BMW, Honda, Mercedes Benz, Nissan, Renault, Stellantis, Toyota, and Volkswagen. However, the VW Group and its brands have halted all paid activities on Twitter until further notice, a spokesman told Reuters. Audi went one step further and also halted organic activities, such as direct posts. Its last tweet is from November 2.
The Takeaway
The news that General Motors intends to build electric cars that are roughly equivalent in price to its conventional offerings is good news, although the company did not explain how the new federal EV tax credit affects those calculations. Now if it can get its dealers to quit price gouging on popular models, that would be huge.
As for Twitter, that situation is so chaotic that it is hard to see clearly what is going on with it. Musk continues to break promise after promise and since he owns it, he can do whatever he wants with the platform.
However, it is easy to understand why a competitor in the auto industry like General Motors would be reluctant to subsidize Musk’s controversial behavior. What Ford and all those other car companies get out of pouring money into Musk’s already overflowing pockets is harder to understand.
GM says the new Equinox EV will start at around $30,000. With the price of battery materials rising dramatically, it’s hard to see how it can keep that promise. The Tesla Model 3 Standard Range was originally supposed to sell for $35,000 (plus delivery charges) but now costs around $45,000. That’s a pretty big jump. If General Motors can bring the Equinox to market priced at or near $30,000, that will be a triumph and a give a big boost to the EV revolution.
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