Monday, March 4, 2024
News GM’s Financial Goals Depend on the Success of BrightDrop

GM’s Financial Goals Depend on the Success of BrightDrop

With a potential revenue of $10 billion by the end of the decade, BrightDrop will play an important part in GM's financial situation.

  • The electric commercial vans entered production in Canada last week.

  • General Motors wants to make 50,000 of these vans per year by 2025.

  • Limited Ultium battery supplies could reduce the output by almost two-thirds.

The new BrightDrop division of General Motors plays an important role in the automaker’s finances because its success is necessary for the company to achieve its financial goals later in the decade.

Intended to rival commercial electric vans such as the Ford E-Transit and the Rivian van, the BrightDrop Zevo 600 entered full-scale production at the CAMI factory in Ingersoll, Ontario last week.

This means that GM owns the first automotive factory dedicated to building EVs in Canada and it means that more than 30 customers will receive the first units of the van by the middle of next year.

The automaker wants to gradually increase production in order to achieve a rate of 50,000 vehicles per year by 2025, which was its initial goal for 2023. At this production rate, BrightDrop could generate $1 billion next year and up to $10 billion by 2030.

The company had to reduce its estimate for the first year of production and concerns about the supply of Ultium batteries lead analysts at Auto Forecast Solutions to believe that only about 16,500 vans could roll off the assembly line in the whole of next year.

This is because the Zevo van is built on a similar Ultium platform as almost every other electric vehicle in the General Motors lineup.

Since only one factory can currently make the cells used in the Ultium battery and considering the popularity of some models such as the GMC Hummer EV, the Cadillac Lyriq, and the upcoming Chevrolet Silverado EV, the automaker is expected to favour more profitable vehicles when determining the distribution of its limited supply of batteries.

This means that the BrightDrop van could be allocated a lower number of batteries since fleet sales are generally less profitable than customer sales, especially in the case of electric vehicles.

The use of the Ultium battery in the Zevo 600 should give it a range of about 402 kilometres. Combined with its 600 cubic feet (16,990 litres) of interior space, this will make it capable of completing longer delivery runs.

In order to offer a product that is better suited for frequent stops and city deliveries, BrightDrop is also working on the Zevo 400, a shorter van that will feature around 400 cubic feet (11,326 litres) of cargo space and possibly a shorter range.

This model will join the Zevo 600 on the assembly line at the CAMI plant, which used to build the Chevrolet Equinox, toward the end of 2024.

Source: Automotive News Canada

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