A year ago, things weren’t looking so good for General Motors’ grand electric vehicle ambitions. The Chevrolet Bolt was gone. The Chevy Blazer EV was off to a brutal start, stranding one of our reporters in a very public faux pas. Software problems plagued the Cadillac Lyriq. We were writing about how the whole “Ultium” plan had gone off the rails.
But the company pushed through, becoming an EV powerhouse and launching the best affordable EV ever, which became our inaugural Breakthrough EV Of The Year.
The market has reacted. GM EV sales are up 94%, pacing to secure the company’s place as the second-biggest EV company in America. But there’s a big, big asterisk on that claim. The company is crushing it with EVs, but its two volume sellers are made in Mexico.
With 25% tariffs set to take effect tomorrow, GM now has to find a way to maintain its momentum despite its two most affordable models getting far more expensive. That’s going to be tough.
Photo by: Fernando Pino
The Equinox EV was our 2024 Breakthrough EV Of The Year, thanks to its great price and impressive range. Unfortunately, it’s built in Mexico.
The Equinox EV starts at around $35,000, and because it’s imported from Mexico, it could have a tariff of around $8,750 for a base model. The Blazer EV will have an even steeper duty. When you dive into GM’s EV sales figures, you see how big of a problem that is. Chevy sold 6,187 Blazer EVs and 10,329 Equinox EVs last quarter.
Those numbers make them the #1 and #2 players in GM’s EV bullpen. Here’s how many sales each of GM’s other EV models recorded last quarter:
- Cadillac Escalade IQ: 1,956 sales
- Cadillac Lyriq: 4,300 sales
- Cadillac Optiq: 1,716 sales
- Chevy Bolt EV/EUV: 13 sales
- Chevy Silverado EV: 2,383 sales
- GMC Hummer EV: 3,479 sales
- GMC Sierra EV: 1,249 sales.
The Cadillac Optiq is also built in Mexico. So adding up the Equinox EV, Blazer EV and Optiq, we get 18,232 sales for the made-in-Mexico models. The other models are all built in the U.S., but accounted for just 13,380 sales between them.
The Blazer and Equinox alone did better than that. They’re also the most affordable models, opening the EV experience to more people. I, for instance, only ended up with a Chevy because my Blazer EV was the cheapest EV to lease at the time, and fit my needs.
Of course, the pickup trucks are currently very expensive, but cheaper versions are coming soon. A new Bolt EV is supposed to arrive this year, too, and it’s supposed to be made in the U.S. Yet even GM’s made-in-America products are going to suffer. According to federal filings, only 36% of the parts value in the Silverado, Sierra and Hummer EVs come from America and Canada (the list does not differentiate between the two). That means that even if all 36% of those parts are from the U.S.A., about 64% of the vehicles’ parts by value will be subject to the 25% tariff.
Long story short: Every GM EV may soon get more expensive.
GM isn’t alone here. The whole industry is reeling from these tariffs, and nobody knows what will happen yet. GM, however, just got its EV revolution rolling. The company claims its EVs are “variable profit positive,” some corporate jargon that essentially means that, ignoring one-time costs and including the benefits of the ZEV credits they would otherwise have to buy, EVs are profitable for the company.
Photo by: Out of Spec Testing (YouTube)
The Chevy Silverado EV 4WT.
That seems unlikely to last. Equinox EV and Blazer EV sales have grown partly on the back of heavy incentive packages. My car had a $52,000 sticker price, and my lease rate was still less than a Honda Civic.
I’ve seen people paying under $5,000 total for a two-year lease of a Blazer, unheard of in this segment. The company needs to sell these cars to offset its thirsty gas trucks and SUVs, so it works, but there’s definitely not enough profit in the price to swallow a 25% tariff.
The trucks will probably get more expensive too, though to a lesser extent. What’s unknown is how much these prices will change relative to the competition. EV rivals like the Hyundai Ioniq 5, Volkswagen ID.4 and Tesla Model Y are all made in America, albeit with varying degrees of U.S. parts content.
Plus, with Trump both threatening to remove the tax credit and telling the automakers he’ll relax fuel economy standards, there are some potential headwinds and tailwinds that still haven’t been worked out.
But with higher prices for everything, it’s unlikely to see sales growth for any automaker, let alone companies so exposed to tariffs.
So GM may have solved its first EV crisis. But with tariffs coming and EV demand softer than expected, the hardest battle may still be in front of it.
Contact the author: Mack.Hogan@insideevs.com.
