DETROIT – General Motors will delay electric pickup truck production at a factory near Detroit due to slowing U.S. demand for electric vehicles, to better manage its capital investments, and to make some engineering changes.
The company said in a statement Tuesday that the factory in Orion Township, Michigan, will instead start making electric Chevrolet Silverado and GMC Sierra pickups in late 2025. Originally the company had planned to start production sometime next year.
Recommended Videos
GM spokesman Kevin Kelly said the change has nothing to do with the ongoing four-week partial strike by members of the United Auto Workers union. “What's happening in the marketplace does play a factor,” said Kelly, who added that the company wants to make engineering changes that will improve the trucks' profitability.
About 1,000 workers at the Orion plant will keep building the Chevrolet Bolt hatchback small electric car and Bolt electric utility vehicle through the end of this year as planned, the company said in a statement.
Workers will be offered positions at other Michigan factories until their plant reopens, the statement said.
GM already is building a Chevrolet Silverado work truck at its “Factory Zero” electric vehicle plant, which straddles the border between Detroit and the enclave of Hamtramck. The plant also makes the GMC Hummer EV as well as the Cruise Origin, a multi-passenger electric ride-hailing shuttle.
GM says it's still planning to ramp up production at Factory Zero next year, including adding a second shift.
Demand for electric vehicles in the U.S. has started to level off after a couple of years of huge growth. In August, for example, automakers sold almost 111,000 EVs, equating to 8.3% of the total market. But in September, sales dropped to just under 106,000, or 7.9% of the market.
August EV sales were up almost 60% from a year earlier, but in September, the year-over-year growth rate dropped to 56%, according to Motorintelligence.com.
U.S. dealers had an 88-day supply of new EVs at the end of September, compared with the industry as a whole, which had a 56-day supply, according to data from Kelley Blue Book. The average price of an EV was just over $61,000 in January, but that fell to just under $51,000 in September. That's because of large price cuts by market leader Tesla and increased production and sales of the lower-cost Chevrolet Bolt.
Sam Fiorani, an analyst with AutoForecast Solutions, a consulting firm, says EV inventory is growing and prices are falling as demand levels off.
“We're transitioning between early adopters and regular vehicle buyers, so the appeal is different,” he said. “Education is required to let them know that these are real vehicles as well. But that transition is a lot more difficult and takes more time.”
Still, Fiorani predicted that EV sales growth won't recede much, but the rate of increase won't be as high as it was previously.
The U.S. government is offering up to a $7,500 tax credit for those who buy or lease EVs. Next year eligible buyers will be able to get the credit at the time of purchase rather than waiting until they file their income tax returns.
“General Motors today confirmed it will retime the conversion of its Orion Assembly plant to EV truck production to late 2025, to better manage capital investment while aligning with evolving EV demand. In addition, we have identified engineering improvements that we will implement to increase the profitability of our products.
Consistent with the original plant conversion plan, represented employees at Orion will be offered other opportunities in Michigan, including positions at Factory ZERO Detroit-Hamtramck Assembly where production has been steadily increasing and significant scaling is planned for 2024, including a second production shift. Factory ZERO is currently building the GMC HUMMER EV Pickup and SUV, Chevrolet Silverado EV, and Cruise Origin. It will begin building the GMC Sierra EV next year.
In January 2022, GM announced it would invest $4 billion to convert Orion Assembly to produce electric trucks using the GM-developed Ultium Platform. Construction includes significant facility and capacity expansion at the site, including new body and paint shops and new general assembly and battery pack assembly areas.
Orion will finish production of the Chevrolet Bolt EV and Bolt EUV at the end of 2023, as previously announced.”
General Motors Senior Director Kevin Kelly
____
This story has been corrected to show that the electric vehicle sales growth rate in September was 56%, not 51%.