‘Saving the planet’ on the back of diesel pickup trucks

Photo: Stuff

Capitalists make decisions on the basis of profit and loss. Therefore it is surprising that GM is betting the farm on new generation automobiles based on the promise of saving the planet, while the public demand is for old technology big guzzler diesel pickups. More so since the capital to fund the new vehicles is coming from the profits on the old models. quote.

GM is realigning its manufacturing footprint and workforce to make more pickups and other light trucks, even as it cuts back production of less profitable vehicles like sedans. The company plans to add 1000 workers to build the new heavy-duty trucks at its factory in Flint, mostly tapping employees laid off from other plants affected by a recently announced retrenchment.

That profit GM earns from trucks alone covers the US$1 billion a year that the automaker puts into its GM Cruise LLC self-driving unit, which has yet to bring in revenue and will only begin to pilot a ride-hailing service later this year.

The investment required to solve the complex problem of getting a computer to drive a car is so expensive that GM sold a piece of Cruise to SoftBank Vision Fund for US$2.25 billion and another stake to Honda for US$2.75 billion.

GM’s truck programme also does the most to help fill the financial hole created by the company’s electric vehicle development.

In 2016, its first year available, each Chevy Bolt electric car sold lost about US$9000 for the automaker. Those losses only scratch the surface of overall spending on development of next-generation cars.

By 2022 the global car industry will spend US$255 billion on EVs and another US$61 billion developing self-drive technology, according to a report last year from consulting firm AlixPartners.

GM sold more than 800,000 full-size pickups last year. The automaker sold another 170,000 of its Chevy Colorado and GMC Canyon midsize pickups, which also make nice margins. The Bolt EV didn’t crack 20,000 in the US and it loses money.

The Washington?Post?end?quote.

If customers vote with their wallets for diesel pickups and shun sedans, is the right response to build sedans in self-drive or EV variants?

Perhaps there is a wellbeing or virtue payback that isn?t obvious?