Alejandro Arrieche
General Motors is betting heavily on the creation of what could be the most affordable electric vehicle to date with the upcoming launch of its $30,000 Chevrolet Equinox SUV.
According to the company’s statement, the Equinox should be hitting the dealerships at some point in the second quarter of 2023 during the fall season. The price point shared by GM’s top executives is significantly lower than those of its top competing electric vehicles such as Model Y from Tesla (TSLA) and Ford’s Mach-E Mustang.
Can GM Really Deliver a $30,000 Equinox?
Industry specialists believe that GM may have a hard time delivering what it is promising as supply chain constraints and elevated raw material costs may ultimately force the automaker to raise the price of the Equinox once the manufacturing process commences.
“We have every intention to build and sell the vehicle that will start in that price range”, the VP of Global Sales for Chevy, Scott Bell, commented during a recent press conference.
Despite aiming for that price point, GM has been a bit vague and reluctant to provide the tiers for all the versions of the Equinox that it will be offering. The base version, the 1LT Equinox, will have 250 to 300 miles’ of autonomy and will feature front-wheel drive only.
Meanwhile, the all-wheel drive format will see the maximum mileage reduce by about 20 miles to 280. On the other hand, other versions of the Equinox such as the 2LT and the 3LT will offer drivers more autonomy while others like the 2RS and the 3RS will provide a higher level of in-vehicle tech and a more luxurious interior design.
GM Is Still Far From Being a Major Player in the US EV Market
GM remains a distant competitor to Tesla and Ford (F) in the United States market according to the latest numbers from Electrek. During the first semester of 2022, the company headed by Elon Musk amassed 68% of the market while GM’s vehicles did not even make it to the top ten best-selling units.
Among legacy manufacturers, Ford is leading the pack with the Ford Mach-E Mustang, which reportedly sold 18,399 units during the first six months of the year compared to 15,317 Tesla Model Ss sold during that same period.
Introducing a $30,000 electric-powered vehicle could change the narrative for General Motors as Tesla’s Model 3 – the closest competitor of the Equinox in terms of price – currently starts at $46,990.
In terms of charging capabilities, all Equinox models will come with a standard 11.5kW charging module and will accept fast charging of up to 150kW that will allow drivers to add 70 miles to the vehicle’s autonomy in around 10 minutes.
The company headed by Mary Barra is planning to build a countrywide charging network in partnership with several companies and currently supports various services including ChargePoint and EVgo.
GM has confirmed that the Equinox will be built in its Ramos Arizpe factory in Mexico, which makes the vehicle eligible for a $7,500 tax credit that could further entice consumers.
Vertical integration remains a goal for General Motors and, for that purpose, it estimates to spend around $4 billion on building facilities to manufacture batteries in North America. For this purpose, the firm recently signed a deal involving the purchase of 950,000 tons of cathode materials.
The macroeconomic backdrop may ultimately tell if GM will have the ability to live up to its promised price point for the Equinox as high raw material costs could make it difficult for the legacy manufacturer to achieve its ambitious goal.
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This article was written for Business 2 Community by Alejandro Arrieche.
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