By Mike Colias
General Motors Co. spent a decade trying to sell mainstream
buyers on electric vehicles by offering small, plug-in cars with
quirky names like the Spark and Volt.
Now, it is trying a different tactic: appealing to customers who
have deep pockets and want to be seen riding in style.
The company's GMC revealed a new all-electric Hummer pickup
during an extended commercial that aired during the World Series
GM executives are resurrecting the Hummer name -- once a symbol
of gas-guzzling excess before the brand was phased out in 2010 --
on a big, pricey plug-in truck in an effort to draw more affluent
buyers willing to pay a premium for the technology.
So far, interest in electric vehicles has been tepid, and
selling pricier models could help GM absorb the higher cost of
producing them, which for now is more expensive than gas-powered
cars, analysts say.
Set to go on sale late next year, the electric Hummer will be
the first model in a string of new battery-powered vehicles on
which GM Chief Executive Mary Barra has pinned her growth
The new approach -- to sell a small number of expensive models
first, and introduce lower-priced versions later on -- is taken
from Tesla Inc.'s playbook, analysts say. Tesla for years sold the
Model S sedan, many of which sell for more than $100,000, before
introducing its mainstream Model 3 sedan, now priced around
GM said the new Hummer pickup truck would be priced at $112,595
when it goes on sale for the 2022 model year. A later version will
go on sale the following year for about $100,000, the company said.
The truck will be able to travel about 350 miles when fully
charged, GM said.
GMC Brand Chief Duncan Aldred said the truck's features and
performance should entice buyers for whom saving gas or polluting
less might be secondary concerns. GM has said a version of the
truck will produce 1,000 horsepower and have sports-car-like
"People who never wanted an EV, or maybe were of the opinion
they would never get one, we think when they see what this is, it
will change their minds," he said.
The approach faces challenges. Several expensive new electric
models from other car companies have garnered only modest sales and
failed to put a dent in Tesla's dominant position as the
electric-vehicle sales leader.
And the lack of electric-charging stations and limited battery
range of electric vehicles compared with gasoline-powered cars
remain barriers for many buyers considering a switch.
The Hummer also is likely to confront several rivals around the
time it hits showrooms, many of which will be lower-priced. Tesla
has said the electric pickup truck it is developing, the
Cybertruck, should go on sale by late 2021, at a starting price
around $40,000. Several electric pickup trucks are on tap from
startup companies, too, including one from Rivian Automotive LLC,
to be priced around $70,000.
"We're all still waiting for the highly successful non-Tesla
electric vehicle," said Karl Brauer, an analyst for iSeeCars.com,
an automotive research site.
GM's top-down pricing approach could mean it will take many
years before electric-vehicle sales generate enough volume to drive
down those higher costs, analysts say. Gas or diesel vehicles now
account for about 98% of GM's global vehicle sales, which totaled
7.7 million last year.
"To truly believe GM's commitment to its EV plan, we will need
to see EV volumes materialize," Credit Suisse analyst Dan Levy said
last spring. GM is targeting one million electric-vehicle sales
annually by 2025.
GM's shares were up over 7% Tuesday afternoon after Bank of
America said investors are underestimating how well the company is
positioned for growth in electric and autonomous vehicles and
services. GM also disclosed plans to spend $2 billion to convert
its assembly plant in Spring Hill, Tenn., to build electric
Research firm AutoPacific Inc. forecasts about 10,000 Hummer
electric-pickup sales in 2023. It predicts about 39,000 sales for
the Cybertruck and 18,000 for Rivian's pickup, named R1T.
Peter Lanzavecchia, owner of Burns Buick-GMC in Marlton, N.J.,
near Philadelphia, said dealers are counting on the Hummer and
other electric trucks that GM has promised to fend off
"The dealer network is hoping to pre-empt the Tesla Cybertruck
with this and for GM to assert its leadership on electric trucks,"
Mr. Lanzavecchia said.
GM still sells the Chevrolet Bolt, a small electric car
introduced in 2016, and plans a larger SUV version of the Bolt.
Both of those vehicles are based on older technology, while the
Hummer will be the first to use GM's proprietary electric-vehicle
system, called Ultium. The second is scheduled to be a luxury
Cadillac crossover in about two years.
The auto maker chose one of the more controversial nameplates in
its history as the first entry for its new electric technology. Mr.
Aldred said the Hummer name had cachet and an upscale connotation
that would match the new truck. He said participants in marketing
focus groups responded well to the idea of a green Hummer.
AutoPacific analyst Paul Waatti said the Hummer name likely will
still carry baggage with some buyers, but younger consumers, who
are more likely to be early adopters of electric vehicles, might
not have a preconceived negative image of the name.
Hummer had its origins in the military vehicle known as the
Humvee, which is still made by AM General of South Bend, Ind.
Despite returning paltry fuel economy of around 10 miles a
gallon, it became a popular model in the early 2000s before soaring
gas prices hurt sales. It also became a target of environmental
groups, which criticized the Hummer as a polluter that symbolized
Attorney Susan Norton is the sort of buyer GMC is courting. She
still drives an early 2000s Hummer that has nearly 200,000 miles on
it. She is first on the list to buy the new electric Hummer pickup
from her dealership, Williamson Buick GMC in Miami. The fact that
the truck is electric is an afterthought for Ms. Norton.
"I've always liked the Hummer's size and the design," said Ms.
Norton. "I want to buy one despite it being electric."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 20, 2020 20:48 ET (00:48 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Nov 2020 to Dec 2020
General Motors (NYSE:GM)
Historical Stock Chart
From Dec 2019 to Dec 2020