GM executives say the automaker is determined to avoid “opportunistic” pricing of its upcoming electric vehicles, going for a long term approach and a lineup spanning segments and price points.
The company does not want to turn off prospective buyers by pricing its EVs too high, President Mark Reuss said earlier this month at the company’s investor day in New York City, Automotive News reports. General Motors is hoping that customers will be switching from gasoline-powered cars to EVs as it prepares to launch more models next year and make Cadillac and Buick all-electric by 2030.
While research shows that consumers are willing to pay a premium for EVs—at least for now—GM will target similar prices to ICE vehicles. 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.”
This sounds reassuring, and GM has more good news for prospective buyers of its EVs. 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.”
Jacobson did not name names, but he was probably referring to Rivian, which had to backtrack on price increases for the R1T and R1S that it initially planned to charge existing reservation holders. Another example would be Ford Motor Company, which has raised the starting price of the F-150 Lightning twice since August on rising material costs and supply chain issues.
“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.”
GM CEO Mary Barra told investors this month that models like the Cadillac Lyriq, Chevrolet Equinox EV, Blazer EV, Silverado EV and GM Sierra EV are “core and critical to our EV growth strategy through 2025.” With the exception of the Lyriq, which is already available, all these Ultium-based vehicles are going on sale next year.