GM’s Cruise Dumps Origin Shuttles for Ultium Chevy Bolt EVs

• Deploying Cruise Bolts rather than the tall Origin box-like minibus helps the automaker scale development of Ultium EVs, said GM’s CFO.

• The Cruise subsidiary lost $900 million in the first half of 2024, off of $100 million in revenues. But it was an improvement from Cruise’s first-half 2023 loss of $1.2 billion.

• CEO Barra confirmed hybrid gas-electric power will be launched “in key segments” in the “2027 timeframe.”

Cruise Origins are out and next-generation, Ultium-based Chevrolet Bolts, with steering wheels and pedals, are in as General Motors continues development of its robotaxi program in Phoenix, Dallas, and Houston, CEO Mary Barra announced in the automaker’s second-quarter earnings call with Wall Street analysts.

The Gen III Chevy Bolt comes to market in late 2025. Barra did not say how soon the Ultium Bolt will be incorporated into Cruise operations.

Until now, Cruise robotaxis have been developed to be as good as human drivers. Now Cruise’s “target is to be better than a role-model driver,” Barra said.

Deploying Cruise Bolts rather than the tall Origin box-like minibus helps the automaker scale development of Ultium EVs, said GM’s chief financial officer, Paul Jacobson, who said the company will take another $2 billion out of electric vehicle costs by the end of the second half of 2024.

“We extinguish the regulatory risk,” as GM is limited by the number of Origins produced because they have no steering wheels and thus do not meet motor vehicle safety standards, Barra said.

That sounds like Origin’s “indefinite hold” could become permanent.

The third-generation Chevrolet Bolt, which will be the first of its three generations on the portfolio-wide Ultium platform, will be larger than the second-generation model, a spokesperson said. The second-generation Bolt went out of production at the end of 2023.

Cruise’s Origin, a one-box sort of minibus with no human driver controls, made its debut in 2020. The Cruise subsidiary lost $900 million in the first half of 2024, off of $100 million in revenues. But it was an improvement from Cruise’s first-half 2023 loss of $1.2 billion.

Barra also confirmed that hybrid gas-electric power will be launched “in key segments” in the “2027 timeframe.” Autoweek reported in February that GM is rushing to market plug-in hybrid electric Chevrolet Silverado and GMC Sierra models. That would be in time to help GM meet new Environmental Protection Agency tailpipe standards.

GM would otherwise meet those ’27 EPA standards with a sufficient number of EVs sold. However, the slowdown in EV growth over the last year or so means GM might not be able to meet the new standards without forcing electric vehicles on an unwilling consumer base without cutting prices (which would hurt residuals on leased EVs as well).

GM sold 22,000 EVs in the second quarter, for a total of 36,000 in the first half of 2024. That doesn’t bode well for Barra’s previous plan to produce 1 million EVs, each in North America and China, by 2025. But Barra backed out from those numbers in an interview with CNBC on July 16.

“We won’t get to a million just because the market is not developing, but it will get there,” Barra said.

“We’re going to be guided by the consumer,” she added, a response repeated in Tuesday’s earnings call. Barra pointed to improving EV charging infrastructure, including “finalizing details to provide our customers with access to 15,000 Tesla Superchargers.”

GM is improving EV costs, and its modular assembly issues are resolved, Barra said. The part-count for the 2025 Cadillac Lyriq has been reduced by 24% from the 2024 model.

Barra and Jacobson said that while EV production will be adjusted to meet demand, GM’s longtime commitment to electric propulsion will not be affected by a change in the White House (Republican presidential candidate Donald J. Trump has said he will cut tax incentives for EVs his first day in office).

“Our strategy is to offer consumers choice,” Barra said, pointing to the Chevy Equinox EV coming in under $30,000 with the tax credits. She noted that 54% of its EV sales are new customers to GM and touted “thousands of jobs” connected to EV production in Ohio, Michigan, and Tennessee.

In China, which was for a time GM’s biggest market, joint venture operations are a growing problem (as they are for virtually all foreign automakers doing business there).

GM lost $100 million in China for the second quarter, compared to a $100 million profit in the second quarter of 2023. GM has lost $200 million there in 2024 so far, as sales continue to fall. GM with its partners sold 744,000 vehicles in the first half of the year, compared with 1.3 million for the second half of 2023.

“Frankly, it’s unsustainable,” Barra said of the combination of falling sales and price competition from local automakers in China. She declined to describe “different items we’re contemplating” for turning around its business there.

Set aside growing problems in the Chinese market and the uncertainty over future growth of the EV market, and GM had a very good second quarter, prompting an improved financial outlook for the full fiscal year.

GM recorded $4.4 billion in adjusted earnings before income taxes (EBIT) off of $48 billion in revenues. It delivered 1,043,000 wholesale units globally, higher than Wall Street had forecast. GM expects $13 billion to $15 billion EBIT for all of 2024, up half a billion dollars over its last forecast.

Does a solid second quarter for General Motors position the automaker to better manage the slower growth of the EV market? Please comment below.