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Payne: Chevy’s future recipe: $35k Equinox EV, new slogan and lots of ICE-ing
Posted by Talbot Payne on November 9, 2023
Amidst heated UAW strikes and cool EV demand, it’s been a tumultuous autumn for the Detroit auto industry. But with plans measured in decades, not months, Chevrolet is staying the course towards an all-electric future. Chevy executives laid out the ingredients of that future as 2023 draws to a close with a new brand slogan, a $35k Equinox EV, and more electric models in high-volume segments than any other automaker.
And in a nod towards market reality, Chevy is baking its EV cake with a lot of ICE-ing.
ICE as in internal combustion engine vehicles. In addition to its ambitious EV agenda, Chevy’s entry-level, gas-fueled, $21k Trax SUV has debuted to strong customer demand and 198% sales growth year-over-year through the third quarter, according to Chevy parent General Motors Co. Its stylish design and utility is a gateway drug to the brand’s big moneymakers: gas-fed pickup trucks and large SUVs. And the sweetest ICE-ing on the cake, the V8-powered Corvette C8, has more models in the works and is expanding its global racing footprint.
“These are transformational times we’re going through” said Vice President for Global Chevrolet Scott Bell. “The next few years are important to our long-term future.”
That electric future will march under a new slogan, “Together Let’s Drive,” which replaces the “Find New Roads” flag that has waved since 2013. It debuts alongside the Equinox EV, Chevy’s first electric vehicle in the country’s largest segment, compact SUVs.
Following Chevy’s promise that a battery-powered Equinox would debut around $30k and with over 250 miles of range, the EV delivers with a $34,995 starting price (before destination fee) and 319-mile range. That’s above the $26,600, gas-powered Equinox (even if the customer qualifies for the full, $7,500 federal EV tax credit), which has 447 miles of gas range.
Such shortcomings compared to their gas peers is one of the reason why EV sales have disappointed. And why GM is pushing back production of the Chevy Silverado EV pickup at Orion Assembly until late 2025.
Even when Chevy EVs and ICEs have comparable pricing, they attract different customers. Thanks to big price cuts and the $7,500 subsidy, the 259-mile range Bolt EV is available at $19,995 — goosing a sales increase of 55% this year (including its sister, the slightly larger Bolt EUV). That price is competitive with the entry-level, $21,495, 422-mile range Trax.
But Chevy marketing guru Steve Majoros says they still appeal to different customers. “There is not a strong cross-shop between the two, Trax and Bolt EV are a different customer base,” he said. “Bolt tends to be shopped by coastal buyers from a higher-income demographic looking for an EV, the Trax buyer is more interested in affordability. The Trax has been doing what we want it to do: get people into the brand.”
Media buzz for Chevy EVs continues to be strong with the 324-mile range Blazer EV winning Motor Trend’s 2024 SUV of the Year award. The publication also crowned the Bolt EV 2017 Car of the Year though the huzzahs did not translate into strong sales, with Tesla’s Model 3 outselling it by 6:1.
“We’re still very bullish on the EV market and very bullish about our position in that market, having a vehicle with Ultium in the three biggest segments in the industry,” Bell said, citing the Equinox EV, midsize Blazer EV, and Silverado EV, which are built on GM’s Ultium battery platform.
Failure to sell EVs will result in billions in fines from California regulators and the federal EPA if targets aren’t met beginning with the 2026 model year. To encourage customer EV acceptance, Chevrolet is leaning on a fleet-heavy sales strategy for its SUVs and trucks. Fleet strategies have been criticized in the past as dumping grounds to boost sales numbers.
But GM’s volume brand sees fleets as crucial to getting a foothold in the market. Corporations like utilities have internal sustainability goals to meet, and the $77,905 Silverado EV Work Truck (nearly twice the cost of a gas WT) is being sold exclusively to fleets. Rental companies like Hertz have been incentivized by the federal government with $7,500 subsidies per EV purchase.
“The EV market is going to be fleet-focused initially because that is where the demand is,” said Bell. “We see it as an opportunity to do volume sales, and we can use fleet markets to expose customers to EVs.”
Fleet sales aside, Chevrolet sees retail demand from high-income customers so Equinox EV will debut early next year with launch editions priced at $48,895 (front-wheel-drive) and $52,395 (AWD). The $35k Equinox EV will come later in 2024. The Silverado EV will also open for retail customers with an upscale RST model at $106,895.
EV market uncertainty means Chevy will continue to lean on its gas truck and SUV lineup to generate profits.
Through September, Silverado sales were up 8% over 2022 and second only to perennial sales champ Ford F-Series. Last year, pickup trucks accounted for 20.5% of new U.S. vehicle sales, up from 16.8% in 2016. Chevrolet’s overall sales volume is up 18% this year.
ICE icon Corvette, a $70k supercar, has already sold over 25,000 units this year as it has added high-horsepower Z06 and E-Ray models. Like Ford’s V8-powered Mustang and Porsche’s flat-6 911, GM intends to continue to use its gasoline sportscar as a brand halo.
That halo will be a missionary all over the world in 2024 as Corvette expands its racing program for the first time to the customer market with a GT3-class model competing against Mustang, Porsche and Mercedes. Like the retail market, endurance racing has been resistant to EVs given their range and cost liabilities.
“Range is a big differentiator for customers looking to buys EVs,” said Bell. “We’re pleased the Equinox has over-delivered in the sense of range.”
Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.