GM executives stated that the automaker is going to avoid “opportunistic” pricing of its upcoming EVs. President Mark Reuss stated that the company doesn’t want to turn off potential buyers by pricing its electric vehicles too high. They are going with a long-term approach and its lineup spans segments and price points.
The president stated about the potential buyers last month at the company’s investor day in New York City. General Motors is hoping that customers will be switching from gasoline-powered cars to EVs as it prepares to launch more models next year and make Cadillac and Buick all-electric by 2030. While research shows that consumers are willing to pay a premium for EVs—at least for now—GM will target similar prices to ICE vehicles. Reuss said GM’s job is to offer “really good vehicles at appropriate segment pricing that doesn’t cost anybody any more money than what they were paying to go into an ICE segment.”
Furthermore added, “It’s our job to deliver the commercial value, to be able to do that at margins that were similar or in some cases above. what we did on an ICE vehicle. … Being opportunistic or episodic with pricing is not what we’re doing here. We’re in the long game, and we’re going to create customers for life.”
CFO Paul Jacobson told investors the automaker will also keep an eye on reservations to avoid having to raise prices on consumers waiting in line. This explains why the company only collected reservations for one model year of the Cadillac Lyriq, even though demand existed for more, it couldn’t predict the cost to build a 2024 model year vehicle. “We weren’t going to make the mistake that others have, where we’re going to go and have to change prices on somebody who’s already ordered a vehicle.”
Another example would be Ford Motor Company, which has raised the starting price of the F-150 Lightning twice since August on rising material costs and supply chain issues. “We’d rather take the risk that the orders dry up or customers suddenly run away from EV transformation rather than put ourselves in a position where we’re exposing the customer to our incapability to manage the production costs of the business.” GM CEO Mary Barra told investors this month that models like the Cadillac Lyriq, Chevrolet Equinox EV, Blazer EV, Silverado EV, and GM Sierra EV are “core and critical to our EV growth strategy through 2025.”