GM factory launch ushers in Detroit's EV pickup campaign

GM factory launch ushers in Detroit's EV pickup campaign

GM is set to officially open its
GM is set to officially open its "Factory Zero" plant near Detroit at an event with President Joe Biden.

NEW YORK: General Motors takes a leap Wednesday towards its much-touted "all-EV" future when it officially opens its first electric pickup truck factory.

The auto giant will unveil Factory Zero, a 36-year old plant in Hamtramck, Michigan that has been retooled for electric vehicles (EV), commemorating the occasion with President Joe Biden.

The celebration at the Detroit-area plant comes ahead of initial commercial deliveries of the GMC Hummer Pickup, the first EV pickup by a Big 3 company as Detroit attempts to extend its dominance in the lucrative US truck market amid challenges by Tesla and newer upstarts.

The EV Hummer pickup is the first of a spate of behemoths from Detroit's legacy carmakers going electric. Ford has unveiled an EV version of its top-selling F-150 pickup, while Chrysler owner Stellantis announced plans for an EV Ram pickup truck as part of a growing fleet.

It's been an accelerated push on the part of legacy companies in the wake of competition not only from Tesla, but from EV startups like Rivian that have soared recently on Wall Street.

With lofty profit margins, pickups are a proven cashcow for automakers, in part because of reliable demand from businesses such as construction and energy companies, as well as government buyers now under pressure to reduce their carbon footprint.

While Detroit can bank on EV pickup sales to such organizations, just how well the vehicles will resonate with rank-and-file consumers remains less clear.

"The question is, who is that electric pickup buyer?" said Michelle Krebs, a longtime analyst at Cox Automotive, who expects the Detroit giants to continue to build trucks with internal combustion engines.

"Initially it's just a sliver of the overall truck capacity," she said of EVs. "They're not betting the firm on EV pickup trucks. They're starting out slowly."

The market's trajectory will also depend on the evolution of transportation in the United States. EVs are currently about three percent of new sales.

The $1 trillion infrastructure bill signed by Biden into law on Monday includes $7.5 billion for new EV charging stations.

It is difficult to overstate the importance of trucks -- especially pickups -- to Detroit auto giants, with profit margins widening as consumers have opted to fill the vehicles with premium gadgetry and creature comforts

In the decade up to 2019, the average transaction price for full-size trucks rose more than 40% to nearly $50,000, according to a report from Edmunds.

Pickups comprised one-fifth of the US market in 2020, a number expected to fall in 2021 due to the semiconductor chip shortage.

"They've really been the bread-and-butter for the Detroit auto companies," said Jessica Caldwell, executive director of Insights. "So they really can't afford to have someone swoop in and as the market produces electric vehicles, put them out of business."

Listing at $112,000, the initial Hummer pickups are more than twice the price of current best-selling pickups and expected to be a niche product. Other EV pickups coming soon will also sell for far less.

In rebooting the Hummer, a hulking vehicle detested by environmentalists after its 1990s launch as a symbol of American excess, GM aims to scramble assumptions about its corporate identity and what makes an EV an EV.

Rather than its climate-friendly qualities, GM's marketing around the Hummer emphasizes the "Supertruck's" off-road prowess, sleek interior design and state-of-the-art driver-assistance technology.

The tank-like exterior hearkens back to old Hummer's massive silhouette, but designers also emphasized the blue lighting effects when the vehicle is charging and the auto's spiffy jet black and gray color combination that are "more high fashion than traditional truck," said Rich Scheer, director of design for the GMC vehicle.

Scheer characterized the traditional pickup buyer as a "pretty conservative group," but predicted such consumers would "fall in love" with the way the trucks handle.

Buyers will mostly want assurance about issues such as range anxiety and how long a charge will last, Scheer said. Using the vehicles for towing or other heavy duty will require more frequent charging.

GM initially estimated the vehicle could go up to 350 miles or more on a single charge, but hasn’t released a final figure. The company has not disclosed total orders, though company officials say the first edition of the vehicle is completely sold out and years worth of Hummer production is planned.

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