As the world moves towards a greener future, electric vehicles (EVs) are playing a pivotal role in reshaping the automotive industry. With major automakers shifting their focus to EVs, the landscape of the industry is rapidly changing, bringing about new opportunities and challenges.

End of Chevrolet Bolt Production and Rise of Profitable EVs

General Motors (GM) recently announced the end of production for the Chevrolet Bolt EV and EUV by the end of 2022, despite record sales and a 50% increase in U.S. sales last year. GM CEO Mary Barra stated that the company needs to focus on profitable EVs, aiming to deliver single-digit profits off its EV portfolio by 2025. The decision to end production was sudden and caught many experts off guard, but the timing coincided with notifying suppliers about the progress associated with retooling the Bolt plant for electric pickup trucks.

EV Market Trends and Pricing

The pandemic caused a spike in vehicle prices due to chip shortages, with automakers rationing semiconductors and installing them mainly in their most profitable, and most expensive, models. The median price of new vehicles in the United States increased from around $38,000 before the pandemic to a record $49,000 in February, while the average EV price soared to more than $58,000, according to Kelley Blue Book. Despite inventories at a fraction of their pre-pandemic levels, EV sales are outperforming even more
optimistic projections of a few years ago.

New Federal Incentives and Emission Standards

With the government set to impose tougher emissions standards on cars and trucks in 2027, automakers will need to sell more electric cars to comply with these regulations. Electric cars are becoming more affordable, can travel longer distances before needing a charge, and are generally cheaper to operate and maintain than gasoline vehicles. Electric cars assembled in the United States currently qualify for a $7,500 federal tax credit. However, rules governing incentives for electric cars will change soon, requiring a certain percentage of battery components and minerals to come from North America or trade agreement countries.

Future of Electric Cars in the Automotive Industry

As the automotive industry continues to evolve, dozens of new all-electric models are expected to debut in the next two years, expanding the EV selection beyond today’s concentration in sedans and small crossovers, and SUVs. With new federal incentives and a growing focus on sustainability, the impact of electric cars on the automotive industry is set to be significant, driving innovation and reshaping the market for years to come.