Gen­eral Mo­tors takes hit to chase e-car boom

China Daily (Hong Kong) - - MOTORING - By BLOOMBERG

Gen­eral Mo­tors Co stands to lose as much as $9,000 on its elec­tric sub­com­pact Chevro­let Bolt. Sounds crazy, but it makes per­fect busi­ness sense un­der the no pain, no gain pol­icy driv­ing the elec­tric-ve­hi­cle boom in the US.

Cal­i­for­nia crafted the doc­trine, with tough clean-air rules and a man­date that au­tomak­ers sell some non­pol­lut­ing ve­hi­cles if they want to do busi­ness in the state, and nine others have adopted it, in­clud­ing New York and New Jersey.

The states’ rules are set to tighten so that zero-emis­sion ve­hi­cles, or ZEVs, will have to in­crease by an es­ti­mated 15.4 per­cent of sales by 2025, some five times the cur­rent level.

The hur­dles may go even higher in Cal­i­for­nia, where green­house-gas emis­sions are re­quired to be 40 per­cent be­low 1990 lev­els by 2030. To get there, ZEVs, plug-in de­mand seems sure to rise, gas tar­gets was cham­pi­oned hy­brids or fuel-cell cars may with ma­jor economies, in­cludby then- Gover­nor Arnold have to com­prise 40 per­cent of ing China, hav­ing rec­og­nized Sch­warzeneg­ger. sales, up from about 3 per­cent cli­mate change as a threat and Un­der the rules, GM needs now, ac­cord­ing to the Cal­i­fore­mis­sions from gas-powered to sell enough Bolts so that it nia Air Re­sources Board staff au­tos a chief con­trib­u­tor. can sell other ve­hi­cles, in­clud­pro­jec­tions. The US has a zero-emis­sion ing pick­ups and SUVs. The

“The idea that au­tomak­ers ve­hi­cle in­cen­tive, of­fer­ing a Bolt’s an­tic­i­pated per-sale loss will sell 40 per­cent of their $7,500 tax credit to buy­ers, and of roughly $8,000 to $9,000 is ve­hi­cles at a loss in Cal­i­for­nia also gives cred­its to man­u­fa­can es­ti­mate based on a sticker is lu­di­crous,” said Eric Noble, tur­ers to re­ward them for cars price of $37,500, ac­cord­ing to a pres­i­dent of CarLab, a Cal­i­forthat meet the green­house-gas per­son fa­mil­iar with the mat­nia-based con­sult­ingter.com­pany,re­duc­tion­tar­gets­set­bythe who reck­ons most elec­tric cars Obama ad­min­is­tra­tion. Here’s how the math works lose at least $10,000 per sale. O n We d n e s d ay, t h e US for GM in Cal­i­for­nia: Let’s

The in­dus­try’s will­ing to En­vi­ron­men­tal Pro­tec tion say it sells a to­tal of 219,962 take the hit on a small scale Agency took a for­mal step ve­hi­cles in one model year (as now. Fiat Chrysler Au­to­moto make it harder for Pre­siit did, in fact, in 2015). To avoid biles NV’s bat­tery-powered dent-elect Don­ald Trump to heavy fines or the threat of getFiat 500e is made for Cal­i­forundo Obama’s tar­gets. EPA ting shut out en­tirely, it would nia alone, and Chief Ex­e­cuAd­min­is­tra­tor Gina McCarneed state-awarded ZEV cred­tive Of­fi­cer Ser­gio Mar­chionne thy an­nounced a pre­lim­i­nary its equal to 14 per­cent of the said in 2014 that it was los­ing de­ter­mi­na­tion that Obama’s to­tal — or 30,794. That would $14,000 per sale. 2025 tar­gets are achiev­able, mean find­ing buy­ers for 7,698

The in­dus­try might fig­ure af­ford­able and ap­pro­pri­ate. Bolts, earn­ing four cred­its for out how to make zero-emisWhat­ever hap­pens in the each, or 10,082 Chevy Volt sion cars into money mak­ers national cap­i­tal, Cal­i­for­nia plug-in hy­brids or a com­bi­naonce the charg­ing-sta­tion will be where the power is for tion of the two. in­fra­struc­ture is built up years to come. The bill that “Elec­tric ve­hi­cles are com­pliand bat­tery costs fall. Global estab­lished its green­house- ance ve­hi­cles and GM knows this,” said the CarLab’s Noble. “The Bolt will take sales from all of the other ve­hi­cles on the mar­ket, and GM will get a lot of cred­its.”

The more ZEVs a com­pany ped­dles to the pub­lic, the more cred­its it earns, and those with a sur­plus can sell them to com­peti­tors that are fall­ing be­hind. Tesla has been able to re­ally tap the pro­gram. In the third quar­ter, it made $139 mil­lion by sell­ing cred­its, which helped Tesla hit its sec­ond-ever quar­terly profit on a GAAP ba­sis.

The US is one-fifth of the global car mar­ket, and groups ready to go to battle over emis­sions like to of­fer an ar­gu­ment be­yond the threats of smog and global warm­ing. Cal­i­for­nia’s poli­cies are forc­ing com­pa­nies to be in­no­va­tive, said Luke Tonachel, a senior an­a­lyst for the Nat­u­ral Re­sources De­fense Coun­cil. If they stop, “US man­u­fac­tur­ers could lose mar­ket share.”

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