General Motors still can't sell its electric vehicles and scares its shareholders

2023-07-06 15:45:43

General Motors wanted to impress its shareholders and posted high second-quarter car sales that rose 19% to 691,978 units.

But General Motors, which has bragged about its sales, cannot say the same for electric vehicles (EVs), as sales of these EVs were minimal at just 16,552 for the second quarter period.

It would have been better for GM to bury the EV sales number because it’s a shame, particularly compared to market leader Tesla, which delivered 466,000 vehicles in the second quarter, globally, but much of it in the US.

GM has a long way to go to sell electric vehicles, because the ones it has made have been real lemons with constant recalls.

Many of the new electric models have not left the factory, because problems have been detected without reaching dealerships, and consumers know it. The cases of the Hummer and the Cadillac Lyriq are known. They have factory issues.

But why does GM have high sales in other vehicles?

Very easy, it has more dealerships than any other manufacturer, even in small towns, it finances its own cars, and in most cases it lets a buyer take a model without giving any down payment.

Sure, this buyer will soon realize the problems with GM models and put it up for sale only to realize that it’s impossible to sell it at debt price, so it has to land on another GM dealer for it. They take the car, and the debt with the manufacturer grows more.

Because of these, millions of consumers are tied up in debt to General Motors and can’t get out of it, so they have to keep buying manufacturer’s brands and have the problems of unreliable cars.

Because GM’s emphasis on EV sales is similar to Ford’s, but the strategy isn’t working for them?

Ford may have some good products and may produce hundreds of thousands of EVs by the end of this year, as it has been more successful than GM in selling EV’s. However, they do not have an extraordinary increase in demand, although they do have much more than GM.

It will be hard to reinvent General Motors’ bad reputation with dodgy cars and in the public eye, despite the billions of dollars it has spent to produce and sell electric vehicles.

Ford had to raise the price of its F-150 Lightning because underlying costs skyrocketed. Even so, sales did not decline.

Meanwhile, Tesla has cut prices in what appears to be an effort to gain more market share than it already has.

Even if Tesla weren’t the giant of the EV industry, GM would have to deal with the fact that every major auto company in the world plans to sell a fleet of EVs in the United States, and most are more reliable than their marks.

Competition will be brutal and positive margins will be hard to come by, so GM should keep its EV numbers to itself, as it would embarrass shareholders for high spending and low return.