GM does a U-turn to save the Chevy Bolt

By Paul Lienert and Joseph White

(Reuters) – General Motors (NYSE:) CEO Mary Barra has staked billions on a broad lineup of electric vehicles such as the Chevrolet Silverado EV designed from the wheels-up to be electric, software-defined vehicles that can match or beat any Tesla (NASDAQ:).

On Tuesday, Barra made a significant exception, reversing a decision to phase out the Chevrolet Bolt.

The Bolt does not align with GM’s long-term EV technology strategy, but it is the Detroit automaker’s best-selling and most affordable EV in North America, by far. News of its scheduled demise at the end of this year prompted criticism of GM for turning its back on an affordable EV in favor of large, expensive models such as the $80,000 and up GMC Hummer EV.

GM is now planning a second-generation Bolt that will come with a new, more efficient Ultium battery pack that should cost 40% less than the current Bolt’s battery technology, Barra told analysts.

“Instead of doing an all-new vehicle, we’re really leveraging what was already there,” Barra said.

The decision to save the Bolt without re-engineering it from top to bottom reflects a new emphasis on what Barra called “winning with simplicity.”

A revamped Bolt “should cost the same or less to produce than the outgoing model,” said Sam Fiorani, head of global forecasting at consultancy AutoForecast Solutions.

The Bolt’s cost has been key to its relative success with a price that starts at $27,495 before federal and state EV purchase subsidies. Barra and GM officials did not say how much the new Bolt would cost or where it would be built.

Tesla’s Model 3 and Model Y outsell the Bolt in the United States by roughly four to one. For GM, the Bolt has been the mainstay for its North American EV sales.

In the first six months of this year, U.S. Bolt sales totaled 33,659 vehicles, outselling Ford’s Mustang Mach-E, Hyundai’s Ioniq 5 and other EVs from established automakers.

Bolt sales rebounded this year after GM was forced to halt production of the car for nearly six months to fix problems linked to battery fires. GM on Tuesday said it was taking a nearly $800 million charge to account for costs of that recall.

Within GM’s EV portfolio, the Bolt has represented more than 90% of its EV sales so far this year, in part because production of GM’s purpose-built, Ultium-architecture EVs has been hobbled by problems at GM’s new battery plant in Ohio.

“If I were GM, I wouldn’t change much,” said manufacturing expert Sandy Munro, president of Munro & Associates, which has done detailed analyses of the Bolt, Teslas and other EVs. “You don’t need to change the body. Elon Musk doesn’t do that.”

Fiorani said one of GM’s Mexican assembly plants could be a leading contender to produce the new Bolt, although “with UAW contract negotiations just starting, GM could offer a next-generation Bolt to a Michigan-area plant” including its Orion Township facility where the current model is produced.