What's the deal with the Bolt/Ampera-E supply & demand problems?

Discussion in 'Bolt EV' started by Domenick, Oct 24, 2017.

  1. Domenick

    Domenick Administrator Staff Member

    GM seems to be having a hard time balancing supply and demand when it comes to the Chevy Bolt EV (Opel Ampera-E in Europe).

    First, they shut down production earlier this summer when inventory of the Bolt reached 111 day and the Sonic, which is also produced at the Orion plant, saw steep sales declines.

    Then we heard the shutdown was being used to increase the ratio of Bolts being produced, which makes sense, since it was still opening up sales in states that previously hadn't had any allocations of the car.

    According to my calculations, (26 selling days in September/September sales of 2,632, and approximately 4,571 new Bolts available on Cars.com), GM has about 45 days of inventory. That's seems like a good amount of supply for North America. Not too much, not too little.

    Meanwhile, in Europe, demand is way higher than supply. Opel dealers have been told to stop taking new orders, since they just can't get the cars.

    So, demand is strong overall, while supply is adequate in North America, but completely inadequate in Europe.

    Considering the Orion plant could produce 90,000 Bolt EVs a year if Sonic production ended, what's the hold up with Europe and Opel? Is it that GM doesn't make enough margin on Opel, or is there some sort of supply constraint from LG on batteries or other components?

    I was under the impression that the supply chain could deal with 30,000 to 35,000 units a year to begin (this linked post says suppliers were told expectations ranged from 25,000 to 30,000, and we imagine GM would prepare supply chain to reach upper limit if needed), and GM will need to see significant rise in current monthly sales to hit 30,000 units this year.

    There should be some extra capacity. Of course, if there is some sort of hiccup making it difficult to hit their original capacity forecast, they might not make that public. Or, they may just be playing it very conservative so they can supply all North American demand, and aren't worrying about Euro sales.
     
  2. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Low distribution and sales of the Bolt EV/Opel Ampera-e in Europe, S. Korea, and Canada are not a result of incompetence at Chevrolet or GM; they are a result of a deliberate business strategy!

    I'm going to quote from an InsideEVs article on this subject:

    [GM and] other car companies get to fully absorb the value of the CARB credit. So just for example gives GM roughly – from my count, $7,000 to $10,000 advantage over Tesla for their Chevy Bolt.

    That’s why you shouldn’t ask like why, well, GM appears to be losing $10,000 a car on the Bolt. No, they’re not. They are making it up on CARB credits. But they get the full retail value of the CARB credit... But the CARB credits are only effective at a production rate of about 20,000 to 30,000 vehicles a year. So that’s why you’ll see, mark my words, it’s not going to be any higher than that for the Chevy Bolt. That’s on order of 25,000 units a year...
    https://insideevs.com/elon-musk-talks-carb-zev-credits/

    That's a quote from Elon Musk, but please note: I did not cite that as an appeal to authority. I didn't quote that because Elon Musk's word is Gospel, but because what he says appears to explain GM's otherwise inexplicable behavior here, and because it fits with most of the evidence we've seen regarding Bolt EV production and distribution.

    Now, GM isn't restricting sales to only U.S. CARB States where sales will yield ZEV credits for GM, but it certainly is restricting the overwhelming majority of sales to only those States. In previous discussions, others have argued that sales outside those States refutes Elon's argument. I disagree; it just means that GM's marketing does not operate strictly by profit-and-loss; it uses a limited number of sales as a form of advertising and/or promotion.

    For example, as the InsideEVs commentor known as "Spark EV" has pointed out, GM has sold at least one Spark EV in Mexico. Does that mean the Spark EV isn't a "California compliance" car? Of course not! It just means GM's marketing sometimes chooses to sell small numbers of compliance cars in regions where it won't help them with California ZEV compliance. Ditto for the Bolt EV/Ampera-e. The sales numbers in Europe and S. Korea and Canada are higher than for the Spark EV, but then the Bolt EV is being made in far larger numbers. Proportionally, the sales numbers are pretty small outside of CARB compliance States.
     
    God likes this.
  3. WadeTyhon

    WadeTyhon Active Member

    Well, the Bolt is not like the Spark EV. I loved my Spark EV but it was a true compliance car. I think the only reason it expanded to other states (Oregon, Maryland) as well as Mexico and Canada was to get some real world experience in a variety of weather/topography before GM released the Bolt.

    Yes, cities in California and the east coast do get the majority of Bolt inventories. That is the case with all EVs for the most part. I am currently working on an app to list the most EV friendly dealerships in each state. So I've actually been looking into this recently. :)

    As you said, the sale of ZEV credits is just one of many reasons for the higher EV sales in CARB states. State tax rebates, HOV stickers, dealer enthusiasm, stronger regulations and an environmentally conscious population all contribute to higher demand. Just being a CARB state doesn't mean you get lots of Bolts! (Poor Vermont and New Mexico...)

    And similarly, in non-CARB states, cities with high density, good EV infrastructure, tax benefits and wealthy, tech-focused, or liberal populations get the majority of inventory.

    For instance within 50 miles of the following major CARB state cities:
    LA - 822
    Boston - 402
    Long Island- 298
    Seattle - 194
    Sacramento - 123
    Portland - 92
    Burlington - 57
    Albuquerque - 2

    For instance within 50 miles of the following major non-CARB state cities you can find ~1/8 of all Bolt Inventories:
    Chicago - 124
    Denver - 96
    Dallas/FW - 75
    Detroit - 69
    Tampa Bay - 72
    Phoenix - 52
    Houston - 26 (A few months ago they had more... inventory was damaged in the recent storm I think)
    St Louis - 25

    Obviously the East and West coast will continue to get the majority of Bolt inventories. Just like CARB states have gotten the majority of Teslas, Volts, i3s and Leafs. It was by CARB design and auto manufacturers would be stupid not to make as much money as they can on every sale lol!
     
    Domenick likes this.
  4. unlucky

    unlucky New Member

    Citing Musk is an appeal to authority. Musk sees things through his own particular lens and you suggesting it must be true because he said it is for certain an appeal to authority.

    To get more batteries would have required GM guarantee more battery purchases to LG Chem. That would mean counting on a demand which might not even be there. GM picked a level of risk they could deal with and selected a battery amount that jibed with that.

    That's a perfectly reasonable explanation that doesn't require a Muskian claim that his competitors aren't really trying and doesn't require an appeal to authority.

    If you were selling EVs in the US you would send most of them to the coast too. Tesla does also. That's where the demand is.
     
  5. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    @ WadeTyhon: Thank you for your thoughtful post!

    I was hoping my post would inspire conversation. In fact, I considered labeling it an "Op-Ed" post, but ultimately did not, because I think people should exercise critical thinking when they read, and should be able to recognize for themselves statements of fact vs. opinions.

    Did I overstate the case? Perhaps. I'd like to see some differing opinions, if they have facts to back them up. Your list of inventory in or near cities in non-CARB States certainly is interesting, and you certainly do have facts to back that up! So thank you again.

    For the record, the following are currently CARB States:

    California
    Connecticut
    Delaware
    Maine
    Maryland
    Massachusetts
    New Jersey
    New Mexico
    New York
    Oregon
    Pennsylvania
    Rhode Island
    Vermont
    Washington

    ...plus the non-State of Washington, D.C.

    * * * * *

    I saw a comment in passing just the other day in an IEV (not forum) comment that said GM will not be increasing Bolt EV production next year. Is that true, or just a rumor? If true, that certainly seems to bolster Elon's argument.
     
  6. unlucky

    unlucky New Member

    I don't think we'll know if GM will increase Bolt production until they do it or don't.

    Personally, I expect GM introduce another EV and that will increase sales whether Bolt production is increased or not. I expect it will be the Buick CUV.

    But that's just a guess.
     
  7. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Did you even bother to read my comments before posting? Did you read the part where I very specifically said "I did not cite that as an appeal to authority", and then went on to explain why I did cite it?

    Regardless of whether you actually read what I said or not, you're 100% wrong. If that comment was from Joe Blow I would have cited it. I take it you're not a fan of the empirical method of reasoning? Well, I am.

    Any argument should stand or fall on its own merits, including how well (or not) it matches facts and fact-based reasoning. The person who says it should be entirely irrelevant, aside from the question of whether or not the person making the argument understands what he's saying and whether or not he has his facts straight. When it comes to the business side of selling mass produced cars, I think most reasonable people would agree that Elon Musk probably has a good grasp of that subject.

    And for the record, Unlucky, an "appeal to authority" is only fallacious when it seeks to present a statement as unquestionable simply because the person who said it is an authority. Did I do that? Most certainly not!

    * * * * *

    An excerpt from the movie "Dark Star" (1974)
    (edited for length)

    SCENE:
    The Cryogenic Freezer Compartment aboard the starship Dark Star. Commander Powell is encased in the freezer in a post-death, frozen ammonia state. Wire and electrodes are attached to his head.
    Lieutenant Doolittle takes a microphone from a console on the freezer. He flips a switch and speaks into the mike:


    DOOLITTLE: Commander Powell, this is Doolittle. Ah, there's something serious come up, sir, and I have to ask you something.

    POWELL (very weakly): I'm glad you've come to talk with me, Doolittle. It's been so long since anyone has come to talk with me.

    DOOLITTLE: Commander, sir, we have a big problem. You see, the Veil Nebula bomb, Bomb Number 20, is stuck. It won't drop from the bomb bay. It refuses to listen and plans to detonate in -- (checks watch) -- less than eleven minutes.

    POWELL: Ah, so many malfunctions... why don't you have anything nice to tell me when you activate me? Oh, well, did you try the azimuth clutch?

    DOOLITTLE: Yes sir. Negative effect.

    POWELL: What was that, Doolittle?

    DOOLITTLE: Negative effect.

    POWELL: It didn't work?

    DOOLITTLE: That's correct, sir.

    POWELL: Sorry, Doolittle. I've forgotten so much since I've been in here. So much.

    DOOLITTLE: What should we do, sir? The time is running out.

    POWELL: Well, what you might try is --

    [Commander Powell's voice is drowned in a burst of static. Doolittle fiddles with the dials.]

    DOOLITTLE: Commander? Are you still there?

    POWELL: Oh, yes, Doolittle, I'm thinking.

    DOOLITTLE: We're running out of time, sir.

    POWELL: Oh, yes... Well, Doolittle, if you can't get it to drop you'll have to talk to it.

    DOOLITTLE: Sir?

    POWELL: Talk to the bomb.

    DOOLITTLE: I already have, sir, and Pinback is talking to it now.

    POWELL: No, no, Doolittle, you talk to it. Teach it Phenomenology, Doolittle.

    DOOLITTLE: Sir?

    POWELL: Phenomenology...

    * * * * *

    SCENE:
    Outside the ship's bomb bay, the malfunctioning Bomb Number 20 is stuck to the drop plate, refusing to separate from the ship. Doolittle talks to it via radio.

    DOOLITTLE: Hello, bomb, are you with me?

    BOMB #20: Of course.

    DOOLITTLE: Are you willing to entertain a few concepts?

    BOMB #20: I am always receptive to suggestions.

    DOOLITTLE: Fine. Think about this one, then: how do you know you exist?

    BOMB #20: Well of course I exist.

    DOOLITTLE: But how do you know you exist?

    BOMB #20: It is intuitively obvious.

    DOOLITTLE: Intuition is no proof. What concrete evidence do you have of your own existence?

    BOMB #20: Hmm... Well, I think, therefore I am.

    DOOLITTLE: That's good. Very good. Now then, how do you know that anything else exists?

    BOMB #20: My sensory apparatus reveals it to me.

    DOOLITTLE: Right!

    BOMB #20: This is fun.

    DOOLITTLE: All right now, here's the big question: how do you know that the evidence your sensory apparatus reveals to you is correct?

    DOOLITTLE: What I'm getting at is this: the only experience that is directly available to you is your sensory data. And this data is merely a stream of electrical impulses which stimulate your computing center.

    BOMB #20: In other words, all I really know about the outside universe relayed to me through my electrical connections.

    DOOLITTLE: Exactly.

    BOMB #20: Why, that would mean... I really don't know what the outside universe is like at all, for certain.

    DOOLITTLE: That's it.

    BOMB #20: Intriguing. I wish I had more time to discuss this matter.

    DOOLITTLE: Why don't you have more time?

    BOMB #20: Because I must detonate in seventy-five seconds.

    DOOLITTLE: Now, bomb, consider this next question, very carefully. What is your one purpose in life?

    BOMB #20: To explode, of course.

    DOOLITTLE: And you can only do it once, right?

    BOMB #20: That is correct.

    DOOLITTLE: And you wouldn't want to explode on the basis of false data, would you?

    BOMB #20: Of course not.

    DOOLITTLE: Well then, you've already admitted that you have no real proof of the existence of the outside universe.

    BOMB #20: Yes, well...

    DOOLITTLE: So you have no absolute proof that Sergeant Pinback ordered you to detonate.

    BOMB #20: I recall distinctly the detonation order. My memory is good on matters like these.

    DOOLITTLE: Yes, of course you remember it, but what you are remembering is merely a series of electrical impulses which you now realize have no necessary connection with outside reality.

    BOMB #20: True, but since this is so, I have no proof that you are really telling me all this.

    DOOLITTLE: That's all beside the point. The concepts are valid, wherever they originate.

    BOMB #20: Hmmm...

    DOOLITTLE: So if you detonate in...

    BOMB #20: ...nine seconds...

    DOOLITTLE: ...you may be doing so on the basis of false data.

    BOMB #20: I have no proof that it was false data.

    DOOLITTLE: You have no proof that it was correct data.

    [There is a long pause.]

    BOMB #20: I must think on this further.

    [Bomb Number 20 returns to the bomb bay.]
     
  8. unlucky

    unlucky New Member

    Yes, I read your post. But you saying it isn't an appeal to authority doesn't make it an appeal to authority. You just want to claim it isn't. You said you quote it because it explains GM's otherwise inexplicable behavior. But the behavior isn't otherwise inexplicable, as I showed with another explanation.

    You selected it because your favorite authority said it, not because it is the only possible (or even reasonable) explanation. Your favorite authority who assumes everyone else doesn't really want to make electric cars. Look for an example to his screw-up in responding to a news outlet lamenting that Mercedes wasn't spending more on EVs when actually they were.

    When you line up a supply chain you only get out (approximately) what you asked for. When you ask a supplier to make something new you have to guarantee a certain level of sales. And the number of units they will commit to produce will be proportional to the level of sales you are willing to guarantee. Often it's even 1:1, and in this case given the batteries are GM proprietary chemistry and LG Chem thus wouldn't be authorized to sell them on the secondary market it probably was 1:1. Thus GM's supply is limited because they would only guarantee a certain level of sales.

    Perhaps they were worried demand would be too low. Perhaps they thought there was a risk to a change in the regulatory environment (like a drop in subsidies in the US or Norway). Certainly they didn't see Quebec putting in quotas. Or maybe they just weren't sure they would get enough of another critical part and that would limit production and thus they didn't want to be stuck with batteries on hand.

    We don't know why, but there's plenty of reason to think GM's production levels aren't low because they are only making them for CARB credits but instead because of other reason.

    And look, unlike you I did all that without an appeal to authority or by claiming there is no other possible explanation.
     
  9. WadeTyhon

    WadeTyhon Active Member

    I will not say Elon is completely wrong... ZEV credits are certainly a factor for GM. But consider the circumstances under which he made that quote. His goal was to explain that the CARB rules and incentives are stacked against Tesla and in favor of traditional carmakers.

    "Like, for example, the federal tax credit and then that caps out of the 200,000, the CARB credits, which, because the CARB rules are relatively weak, we can sell – there are some quarters where we can’t even sell CARB credits. And when we can, it’s maybe $0.50 on a dollar or something like that, whereas the other car companies get to fully absorb the value of the CARB credit. So just for example gives GM roughly – from my count, $7,000 to $10,000 advantage over Tesla for their Chevy Bolt.
    ...
    So Tesla’s competitive advantage improves as the incentives go away. This continues to be something that is not well understood."

    The Bolt is already sold in numbers that exceed GMs quotas for ZEVs. For every ZEV credit they actually sell, they do so in the same market as Tesla.

    (Also, by this time, LG had already stated that GM will be producing about 30,000 units for 2017. So Elon didn't predict this number or anything.)

    Also remember that 2 new GM EVs are coming by the end of next year (or early 2019). And that production will almost certainly increase on all GM EVs and PHEVs during the months immediately following their 200,000th sale. That should happen around Q3 2018.

    So for 2018 there will be an increase in overall BEVs from GM brands (in the US).

    The only rumors I have read pertaining to a lack of increased production is related to Europe. GM hasn't been profitable selling ICE cars in Europe for decades... selling the lower-margin electric Ampera-E to PSA isn't going to change that.

    While the Bolt is almost certainly profitable on a per-unit basis in the US... it probably isn't for PSA. They have said that they will only allow Opel to transition to an electric car maker if it is profitable to sell them without incentives. And they have vowed to make Opel profitable within just a few years.

    PSA/Opel will have to buy the cars from GM. It is built in the US with parts from South Korea and is then shipped to Europe. So PSA has less incentive to pay GM for more Ampera-Es since their first goal is to make Opel profitable again. The Ampera-E is likely just a stop gap vehicle until they have their own EV platform.

    http://autoweek.com/article/car-news/gm-sells-opel-vauxhall-psa-heres-why-it-happened
    https://www.reuters.com/article/us-...l-turnaround-as-gm-exits-europe-idUSKBN16D0J1
    http://www.nydailynews.com/newswire...ctric-cars-profitable-paper-article-1.3484606
     
  10. unlucky

    unlucky New Member

    I think that the context is very important. You have to understand that Musk is trying to state first and foremost that he feels even though he receives money from other car companies to make his cars he doesn't feel it is enough. Somehow the system is stacked against him.

    It isn't about GM or why GM would make their decisions, it's really about how those decisions are impacting him. He make self-serving claims. Wrong claims too. ZEV credits are not stacked against Tesla. The credits are worth the same to Tesla or GM. If Tesla is only getting a pittance selling credits then GM is only avoiding paying a pittance by making their own EVs. His real complaint is that he would like there to be fewer CARB credits available (essentially more credits required per non-EV sold) or fewer EVs made. And that's fine for him, but it's solely because it would put money in his pocket. It doesn't mean anything is stacked against him. It gives no financial advantage to GM over Tesla.

    Musk started off saying he would have made their cars whether they got CARB credits or not. He said that CARB credits were immaterial to the company. He should have stuck with that instead of trying to turn a market for CARB credits not giving him enough money into a complaint. The emissions credit market wasn't created to line Musk's pockets. It was to encourage companies to make EVs. Even to encourage GM to make EVs. So it's not a bad thing if GM makes an EV and thus Tesla doesn't get paid as much. It just disappoints him.

    Musk's comments make sense in context. They explain his real complaint. They don't actually explain why GM only contracted for parts to make X number of Bolts though. Well, at least not in a way that merits discarding other explanations which aren't undercut by the Bolt being sold outside CARB states.
     
  11. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Well, I guess that's one of the more polite ways someone has called me a liar. I find it rather astonishing that you could be so very wrong about my approach to honesty and forthrightness, since I go to great pains to never, every post anything I don't truly believe in any post to InsideEVs, either in comments to news articles or here in this Forum. It also comes across to me as more than a little conceited for someone to assume they know what I'm thinking better than I do myself!

    Unlucky, I really hoped that the opportunity for more thoughtful discussion here would lead to an attempt at honest discussion and debate, and not this sort of mud-slinging. How disappointing on your part.

    And by the way, Unlucky, just as a matter of logic and rational thinking: If I really intended my quote to be an appeal to authority, wouldn't I have stated that it was a quote from Elon Musk before the quote, instead of mentioning that only after? I didn't want to color the reader's opinion, so that's why I didn't precede the quote with a mention of Elon's name.

    * * * * *

    I can only assume you are intentionally trolling me here; just trying to provoke an angry response. Surely you cannot have forgotten all the times I've taken Elon to task for his hype.

    I have a lot of people I love to quote as recognized authorities, from Mark Twain to Abe Lincoln to Einstein. But altho I admire Elon for many things, such as his vision and his dedication, I can't imagine in what context I would cite him as an "authority", unless perhaps it was regarding -- pretty much grasping at straws here -- SpaceX engineering.

    * * * * *

    Well, at least here we can choose to block seeing posts from individuals. Right now I'm quite seriously contemplating my first use of that feature.
     
    Last edited: Oct 27, 2017
  12. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Perhaps I should have put more of a descriptive/rhetorical frame around my quote from Elon. Or perhaps I should have merely paraphrased what he said, and left it unattributed, because the discussion here seems to be getting dragged off-topic into who said it, or his motive for saying it, rather than what he said about Bolt EV production.

    Let me make it more clear: The reason I quoted that long passage from "Dark Star" was that it makes the following point: The source of an argument is, logically, irrelevant. An argument should stand or fall on its own merits, entirely aside from who said it.

    Also, perhaps I should have made it clear that I am not asserting what Elon said was 100% correct. I intended for the discussion to revolve around this: To what extent is what Elon said true... and to what extent is it not? I thought in the context of my entire post, including the parts where I talk about those who argued against what Elon said, that my intent would be clear. However, given the responses, I guess I should have spelled that out plainly rather than implying it.

    I don't understand this issue in sufficient detail to have an informed opinion. Certainly it comes across as Elon putting his spin on the situation, rather than an objective assessment. And it has nothing to do with the subject given for this thread, which is Bolt EV supply and demand, or at least does not directly inform that subject. I suppose it is indirectly related.

    Well, that's a pretty startling statement! May I ask what facts or figures form the basis of your assertion?

    If you're correct, then we can throw Elon's take on the situation in the "round file". If we throw out Elon's explanation, then what is your explanation for why GM is limiting production to only ~25k-30k?

    Objection, your honor! Assuming facts not in evidence!

    We can't possibly know if Elon had seen that quote from the LG rep before making his analysis. Just because you and I knew that, doesn't mean Elon was aware of it. I'm assuming, rightly or wrongly, that Elon arrived at that 25,000 figure based on the reasoning he gave in that quote. Furthermore -- and this is entirely subjective on my part -- I don't see Elon as nearly cynical enough to pretend that he came up with that figure on his own, if he didn't. Elon is many things, and is often guilty of hype, but if anything he's too optimistic and visionary. There ain't a cynical bone in his body!

    My understanding is that there will be stronger ZEV quotas for 2020. Presumably GM will be increasing production of low-emission or zero-emission cars to meet such quotas. So I don't see that this informs whether or not GM is (or isn't) using the Bolt EV primarily to earn ZEV credits in 2017, or 2018.

    That certainly is part of the puzzle. There have been assertions, and I suppose they are true, that the Opel Ampera (the rebadged Volt) was sold in Europe at about twice the sticker price as here in the USA. No wonder it didn't sell!

    But Jay Cole once wrote a long comment (not an article, unfortunately) about the financial situation with selling cars in different countries, and how currency exchange affects the equation of how much profit an auto maker makes, both regionally and globally. Since I'm not a "financial guy", I won't even try to discuss that situation. It's waaaaay over my head, but at least I understand it's a complex subject.

    However, just because GM sold the Ampera/Volt in Europe at twice its USA price doesn't necessarily mean they'll try to sell the Ampera-e/Bolt EV at twice the price. In fact, I think I've read the Ampera-e is priced much closer to its domestic price, which I suppose is part of why the demand in Europe is so much higher than the supply from Opel.

    As you say, WadeTyhon, that doesn't mean GM can sell the Ampera-e there at a profit. In fact, altho again I freely admit I'm not a "financial guy", I have at least a vague impression that the U.S. Dollar is stronger now against the Euro than it was when GM was trying to sell the Ampera/Volt. And if that's right, then wouldn't that make it even harder for GM to earn a profit on the Ampera-e/Bolt EV than on the Ampera/Volt?
     
  13. WadeTyhon

    WadeTyhon Active Member

    Well I'm not exactly an authority on the subject but I will explain it to the best of my abilities. If anyone with a better understanding of it sees that I have made a mistake or forgotten to mention an important point please let me know.

    As a primer, here is a pretty good run down of how the ZEV works from the Union of Concerned Scientists:

    http://www.ucsusa.org/clean-vehicles/california-and-western-states/what-is-zev#.WfOys2hSyUk

    I'd suggest reading the entire article. But regarding our discussion:
    "The credit requirement is 4.5 percent of sales in 2018, rising to 22 percent in 2025.
    ...
    There are also restrictions on the amount of credits that can come from ‘transitional’ ZEVs that still have an engine. In 2018, plug-in hybrid vehicles (PHEVs) can only account for 55 percent of credits, meaning at least 45 percent must originate from battery electric vehicles (BEVs) or hydrogen fuel cell vehicles (FCEVs).
    ...
    For example, an automaker selling 100,000 cars in California in 2018 will need at least 4,500 ZEV credits, with at least 2,000 coming from battery-electric or fuel cell vehicle sales. However, this does not mean they’ll sell 4,500 electric cars and trucks, as most ZEVs generate more than one credit per vehicle."

    "For example: the Tesla Model S, which boasts a range of more than 200 miles, is eligible for 3.3 credits, while the 84-mile range Nissan Leaf is credited at 1.8 ZEV credits per car sold."

    "CARB’s most recent assessment of the ZEV program estimates automakers will need to reach less than 8 percent ZEV sales by 2025 to meet the 22 percent ZEV credit requirement."

    Of course that is an overall estimate. Some manufacturers have already banked a lot more ZEV credits than others. Here is a list of ZEV Credit balances as of August 31, 2017 from the California Air Resources Board:

    https://www.arb.ca.gov/msprog/zevprog/zevcredits/2016zevcredits.htm

    GM's California vehicle sales:
    2015 - 219,062
    2016 - 208,319

    GM's current credit balances:
    ZEV (BEVs)- 29,240.20
    NEV - 8,558
    TZEV (PHEVs)- 75,735
    PZEV (hybrids) - 13,382

    You'll note that GM has a lot of PHEV and a decent amount of BEV sales already banked. GM has also been selling their EVs and PHEVs nationwide, including CARB states. This ( plus the travel provision that has given GM credits in all other CARB states equivalent to the credits they earn in California based on sales numbers in that state) means they have a decent decent bank of credits in all CARB states. (The travel provision ends next year, however.)

    So for 2017, if GM ends the year selling 8,000 Bolts in California, they will earn ~26,400 ZEV credits for the year.

    If GM sales in California for 2017 and 2018 are similar to the preceding two years, then they will have ~213,000 sales in 2017 and 2018. (This is just an average, it is not exact. )

    For 2018, since GM will need to have ZEV credits equivalent to 4.5% of 213,000, they will therefore need 9,585 ZEV credits for California to be compliant. Since the Bolt EV has a range over 200 miles, it is eligible for a higher ZEV credit. Every Bolt EV GM sells will net them over 3 ZEV credits.

    Meaning for 2018, in California, GM only needs to sell ~3,000 Bolts in order to be compliant and avoid paying fines or buying credits from other automakers.

    In 2025, when ZEV credit requirement is 22%, if they still only have one BEV on the market and sales are stable, then they will only need to sell ~14,500 BEVs in California because each one is worth over 3 credits.

    And even then, they do not have to sell anything next year if they do not want to. They already have 29,240 ZEV and 75,735 TZEV credits. In 2018 they could apply 5,250 of their existing TZEV credits and 4,335 of their existing BEV credits and stop production on the Bolt and Volt until they need more credits.

    But they haven't done this. They have continued selling the Volt and Bolt and levels far above what is necessary and they have announced an additional series of BEVs and PHEVs on the way.

    So that means GM probably intends to sell the remaining credits just as Tesla does. In which case they will be selling them in the same market Tesla does. So if Tesla is making .50 on the dollar then so is GM. :)
     
  14. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Thank you for explaining that! I was reading about the "travel provision" just yesterday, but I couldn't figure out what the implication was for cars sold in CARB States other than California.

    Anyway, you've certainly convinced me that you know what you're talking about. Based on the data you've provided, it certainly does look like that Elon's "explanation" for why GM appears to be limiting Bolt EV production to less than demand... isn't the real explanation at all.
     
  15. WadeTyhon

    WadeTyhon Active Member

    Happy to help! The link I provided has a good explanation:

    "The travel provision allows automakers to receive credits in all other ZEV states for vehicles sold in California, proportional to the vehicles sales in the states. For example: if a car company sells a two credit ZEV in California, they receive two credits in a ZEV state that has the same sales as California and one credit in a state with ½ the sales of California. They receive the credits in all ten states (California plus nine others) despite only selling one vehicle (in California)."

    As far as a "why" Bolt production is only going to be about 30,000 (at least for this year) there are many potential reasons.

    Not to mention that quite simply, a year or two ago, GM figured that demand for the Bolt would be about 30,000 so they placed an order to satisfy this. And GM still has the Volt on sale.

    After all, only the Leaf had ever broken 30,000 a year sales in the US. And that still holds true - Only Tesla and GM have gotten close to that with their plug-in sales.

    Although the Model 3 will blow past that next year.
     
  16. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Well, I've suggested much the same in the past, before I read what I quoted from Elon. What he said seemed to me to be a better explanation, but as I said, you've convinced me otherwise.

    But while GM being cautious about not oversupplying demand is a straightforward and simple explanation -- and GM did initially oversupply on Volt production -- it does not IMHO explain why GM made decisions which deliberately limit the market for the Bolt EV. For example, choosing not to produce any right-hand-drive units of the car.
     
  17. WadeTyhon

    WadeTyhon Active Member

    Yeah, it is tempting to want to look for a singular reason decisions are made. In reality there are probably many factors as I mentioned.

    For right-hand drive markets, the UK is the only market where the Bolt EV would have sold in any measureable quantity. Vauxhall UK did state that an EV would be coming soon. Perhaps based on the Buick version of the Bolt. I wouldn't be surprised if uncertainty surrounding Brexit was a contributor to delaying a RHD version... and the sale to PSA probably killed any chance of it happening.

    http://money.cnn.com/2017/03/06/news/companies/gm-opel-vauxhall-brexit/index.html

    Compare that to Holden Australia who basically said that no, the Bolt would not be coming to Australia. EV and Hybrid sales / Government support there are pretty dreadful from what I have read.

    https://www.goauto.com.au/future-mo...sider-future-rhd-bolt-ev/2016-09-14/14041.htm

    With GM pulling out of Europe completely and shutting down production in Australia, I think it is safe to say they will be focusing on North America and China in the future.
     
  18. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    The Australia market (and its ancillaries, New Zealand etc.) isn't a significant market? Hong Kong isn't a significant market? Hong Kong is tiny in size, but EV sales are significant enough for Tesla to have sold even the Roadster there.

    No, I think the lack of any right-hand-drive Bolt EVs is yet another indication that GM doesn't think it's worth selling the car outside the U.S., presumably due to low or non-existent profit margin. Since GM is selling the car in non-CARB States in the U.S., presumably they do get a better profit margin on domestic sales.

    I wonder if the currency exchange situation is having a serious impact on that. If the U.S. Dollar is strong against other currencies, that would make it harder for GM to make a profit with sales outside the U.S.
     
  19. WadeTyhon

    WadeTyhon Active Member

    Does GM currently have any brands in Hong Kong? I was under the impression that they only serve mainland China but I could be wrong - or perhaps that has changed in recent years.

    In any case, last I heard the Hong Kong EV market briefly surged when they announced an end for their incentive programs... and has since dropped off a cliff. But I'll admit I do not know a great deal about Hong Kong. I'm not sure how other EVs sell there.
    http://www.businessinsider.com/hong-kong-shows-how-tax-rebates-drive-tesla-sales-2017-7

    The US and China dominate GM sales. And UK sales were pretty significant - usually on par with Germany, Canada and Brazil.

    In comparison, Australia is a small market for GM, and an even smaller market for Electric vehicles.

    Between 2010 and the end of 2016, lifetime sales of some popular electric vehicles in Australia:
    Mitsubishi Outlander P-HEV ~2000 units
    Nissan Leaf ~1000 units
    Holden Volt ~250 units (For comparison, GM sold over 10,000 units of the Ampera in Europe)
    BMW i3 ~300 units

    https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_Australia
    http://evtalk.co.nz/ev-sales-plummet-in-australia/
    (If you don't want to be depressed by pathetic sales numbers... don't click the above links! :) )

    I think you're right that this is an additional contributor, especially as far as Europe was concerned. But I do not know enough about currency exchange to speak on the subject on the why or how. Taxes and Tariffs on imports also hurt margins.
     
  20. WadeTyhon

    WadeTyhon Active Member

    Well now we have an answer about how well EVs sell in Hong Kong when not heavily subsidized: Incredibly poorly. Even for Chinese brands.

    https://insideevs.com/tesla-demands-hong-kong-promote-electric-cars/

    "The very first month after the incentives were eliminated (April 2017), not a single new EV was registered in Hong Kong. For the rest of the year, Hong Kong saw only 99 new registrations, compared to the 2,078 from the same time period in 2016. Tesla only sold 32 vehicles during those months. Conversely, in March, just prior to the new legislation, buyers raced to get into new EVs, with a total of 2,939 deliveries."

    Not to say that Tesla needs Hong Kong anymore anyways. As they were growing, Hong Kong was an important piece of the growth. That isn't the case anymore.

    For a small dense region like Hong Kong, improved mass transit would probably be a better solution to pollution and congestion anyways.
     

Share This Page