Welcome to the Daily 5 report for Thursday, Sept. 4.
General Motors doesn't usually produce monthly sales reports, but for August the automaker happily disclosed it generated an all-time record of more than 21,000 EV deliveries across its four primary brands.
Then today reports emerged of EV production cuts at GM's plant in Spring Hill, Tenn., along with the indefinite delay of a second shift at an assembly plant near Kansas City, which is slated to begin production of the Chevy Bolt EV this year, a source told Reuters.
With the Sept. 30 elimination of the $7,500 U.S. EV tax credit just weeks away, GM's forecasters probably took a critical look at their supply and demand charts.
Other EV makers in the U.S. are no doubt running those same calculations. The Wall Street Journal just reported this afternoon that EV maker Rivian Automotive is cutting less than 1.5 percent of its workforce.
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GM said it "is making strategic production adjustments in alignment with expected slower EV industry growth and customer demand by leveraging our flexible ICE and EV manufacturing footprint."
Translation: GM isn't going to overproduce a product that's going to face cratering sales after Oct. 1. GM North America President Duncan Aldred signaled the production cuts in a Sept. 2 blog.
"We're expecting strong demand once again in September," the blog said. "The question, of course, is what's next?
"There's no doubt we'll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize. We will almost certainly see a smaller EV market for a while, and we won't overproduce. Still, we believe GM can continue to grow EV market share."
He added: "We are seeing marginal competitors dramatically scale back their products and plans, which should end much of the overproduction and irrational discounts we've seen in the marketplace."
Dealers, meanwhile, are showing a record level of pessimism about the future of EVs, according to a new Cox Automotive survey.
"The outlook for future EV sales really comes as no surprise. Dealers have calendars, too," Jonathan Smoke, Cox chief economist, said in a statement.
One could argue the EV tax credit was irrational in the first place because it created an artificial demand for the product. Now it looks like EVs will have to compete without subsidies unless certain states (read: California) step up with their own tax credits.
That's it for now. If you want to see this story in your browser, click here.
— Philip Nussel, online editor
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