I received a lot of negative comments after I called the Chevy Bolt EV a compliance car following GM’s cancellation of the nationwide availability at launch. My suspicion and some whispers I’d heard pointed toward GM losing thousands of dollars on each Bolt vehicle before accounting for ZEV credits in California and other markets.
Electrek talked off-the-record with a few people familiar with the Bolt EV program, and the figure of $10,000 was thrown around as the anticipated average loss per vehicle before incentive. Now Detroit News is corroborating today with a similar story citing a person familiar with the matter, claiming the anticipated loss on the $37,500 base price is roughly $8,000 to $9,000.
A GM spokesperson declined to comment on the story.
An important reason for the loss is that GM has little control over almost all of the more costly components of the car. LG is an incredibly important supplier to GM’s Bolt EV program. In fact, the Bolt is almost as much an LG product as it is a GM product. LG Chem supplies the battery cells, but between its other divisions, the South Korean giant supplies all the main powertrain components, the HVAC system, and the instrument/infotainment cluster, among other things.
GM already confirmed that it is paying LG $145 per kWh for the battery cells. That alone is about $8,700 per car and with the battery pack, it could easily go up over $12,000. That’s only for the battery pack with cells. Considering all the other parts GM is buying from LG, the automaker could easily be paying over $20,000 per vehicle to LG before even starting to assemble the vehicle.
The Bolt EV officially went into production at GM’s Orion Township assembly plant in Michigan earlier this month:
There’s no greater proof of a vehicle being a compliance car than being sold at a loss before incentives. Under California ZEV program, GM will receive 4 ZEV credits for every Bolt EV delivered in the state. At a market value of about $4,000 to $5,000 for GM, it means that selling a Bolt in California makes the difference between losing $8,000 to $10,000 per vehicle and making $8,000 to $10,000 per vehicle.
Now the fact that it is a compliance car doesn’t mean that it’s a bad vehicle. You can still make a vehicle primarily to comply with regulations and still make that vehicle great. We’ve shared our thoughts on the Bolt at Electrek on a few occasions, and despite some holistic concerns with long distance travel and a utilitarian appearance, we think it can be a popular vehicle if people can get over the fact that they are paying over $37,000 for a Chevrolet that would cost $20,000 if it were internal combustion.
It could also at some point evolve from a compliance car program into a full vehicle program. After all, the Volt was a money-losing program for years before incentives for GM before finally being profitable earlier this year.
In the meantime, it will be difficult for GM to deliver the car where it will not get $16,000 to $20,000 worth of ZEV credits to compensate the loss on the gross margin. If you are in California or another ZEV state, you could consider the Bolt EV since it starts at an attractive price after incentives, but it will be more difficult to get your hands on one anywhere else – like it was in the early days of the Chevy Volt or as it is currently with the Chevy Spark EV.