One thing that doesn’t get a whole lot of attention in discussions about EVs are the volumes in the factories where they are built. . . .

By Gary S. Vasilash

In announcing its Q3 performance, General Motors did the typical approach of accentuating the positive. As the company’s sales were down 2.2% in the quarter compared with Q3 ’23 and are down 1% year-to-date compared with ’23, that wasn’t going to be it.

Rather, as Rory Harvey, GM executive vice president and president of Global Markets is quoted:

“GM’s EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everybody, no matter what they like to drive.”

While in Q1 ’24 GM’s U.S. share of the EV market was 6.5%. It reached 9.5% in Q3.

Clearly its EV sales are on an upward trajectory. But multiple models can drive up production costs.

The Models

Taking BrightDrop commercial vehicles out of the picture, since January GM has sold 70,450 EVs.

Specifically:

• 20,318 Cadillac LYRIQs
• 15,232 Chevy Blazer EVs
• 8,582 Bolt EV/Bolt EUVs
• 10,785 Equinox EVs
• 5,252 Silverado EVs
• 8,902 GMC HUMMER EVs
• 387 Sierra EVs

The LYRIQ is built in Spring Hill, Tennessee.

The Blazer EV is built in Ramos Arizpe, Mexico.

The Bolts are built in Orion, Michigan.

The Equinox EV is built in Ramos Arizpe.

The Silverado EV, HUMMER EV and Sierra EV are made in Detroit-Hamtramck.

Seven vehicles.

Three factories.

And some 70,450 have been built over a nine-month period.

While there is certainly some sharing of components, there are things like body stamping that aren’t common, which means dies. And the interiors of the three vehicles built at the Factory ZERO plant are different executions, though, again, there are some common parts.

But the point is, there are different costs associated with these vehicles’ production.

Capacity Utilization

Let’s say that the production capacity of an assembly plant is 250,000 vehicles per year.

A rule of thumb is that such a plant must operate at 80% capacity in order to be profitable, so that would be 200,000 units.

Even if the production of EVs doubles from the end of Q3 to the end of Q4, that’s 140,900 vehicles, or 70.45% of a 250,000-unit-capacity plant.

Now in the case of the Ramos Arizpe plant, in addition to the Chevy EVs it is producing the ICE Blazer and the Honda Prologue EV. The former has sales through Q3 of 40,545 vehicles and the latter 14,179.

So with all four of the vehicles being built there, there is an output through Q3 of 80,741.

If that number is doubled by the end of the year to 161,482 (which, of course, won’t happen), that would be about 65% capacity utilization of a 250,000-vehicle plant.

But let’s go back to the 70,450 units of GM EVs sold through Q3.

It is worth noting that during the same period there were 70,710 Chevy Colorados sold.

One model. One plant.

And it shares Wentzville Assembly with the GMC Canyon (26,956 sold through Q3, or 6,638 more vehicles than the best-selling GM EV. In fact, you could add the sales of the Silverado EV and the Sierra EV onto that LYRIQ number and it would still be short of the Canyon: 25,957.)

Profitability in EVs is going to take GM and some of its competitors a bit more than reduced battery costs.