Elon Musk: GM is in it for the CARB credits, will produce only 25,000 Chevy Bolts per year

As a plethora of pundits pontificate about Tesla and the hypothetical competition for its upcoming Model 3, many fall into error because they don’t understand the dynamic between Tesla, which exists to sell EVs, and the legacy automakers, which grudgingly sell a few in order to comply with government regulations.

Elon Musk is happy to explain the issue, as a stock analyst found out on the recent Q1 earnings conference call. First, Musk debunks the notion that Tesla is dependent on subsidies: “Over the years there’s been all these sort of irritating articles like Tesla survives because of government subsidies and tax credits. It drives me crazy. Here’s what those fools don’t realize…Tesla has succeeded in spite of the incentives, not because of them.”

Speaking of the California Air Resources Board’s Zero Emission Vehicle program, Musk said, “[Because] the rules are relatively weak, there are some quarters where we can’t even sell CARB credits. And when we can, it’s maybe 50 cents on a dollar or something like that, whereas the other car companies get to fully absorb the value of the CARB credit. So [that] gives GM roughly, from my count, a $7,000 to $10,000 advantage over Tesla for their Chevy Bolt…They get the full retail value of the CARB credit, whereas we get the wholesale value when we’re lucky.”

Many Tesla skeptics expect Model 3 to face stiff competition from the Chevy Bolt. However, those with more knowledge of the EV market understand that (unless there is a major change of strategy in Detroit) GM will probably produce the Bolt in limited numbers.

“The CARB credits are only effective at a production rate of about 20,000 to 30,000 vehicles a year,” explains Musk. “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, or 10% of our initial production rate for the Model 3, or 5% of what Model 3 will be next year.”

Musk is not the only one who has thrown out that 25,000-per-year prediction. A couple of years ago, when the Bolt was still in the planning stages, InsideEVs reported that “supplier sources who need significant lead time to prepare for production say they are being told that General Motors expects to sell 25,000-30,000 Bolts per year once production is underway.”

 

Source: InsideEVs

  • http://TeslaBargain.com Tesla Bargain

    GM made it crystal clear that the Bolt is just a compliance car and that they are loosing money on each Bolt sold, so the same outcry as from Fiat for the 500e: “Don’t buy it!”

    • Michael Walsh

      ,you mean losing money.. Sp -5

      • Michael Walsh

        Score 95% A

      • http://TeslaBargain.com Tesla Bargain

        Not a native English speaker, but interestingly both LOSING and LOOSING seem to fit nicely. 😉

  • Food4Thought

    Can someone explain how CARB credits work and why Tesla is at a disadvantage with them?

    • Tim Kulogo

      CARB credits allow you to sell a particular number of gas cars. Car companies need them, except Tesla, because they have no gas cars. Tesla tries to sell theirs, but they sell so many electric cars, it’s difficult to sell that many CARB credits.

      • Food4Thought

        Thanks Tim!

  • timerbeltkiller

    Is ampera-e (the Bolt for Europe) inclusive or exclusive 30K yearly output?

  • Ramon A. Cardona

    Opinions matter but GM is marketing the Bolt in other nations as well. However, there are forces beyond GM’s efforts to make EV’s for global markets; that is to say the deployment of fast charging networks that will help EV sales. Chevy has two EV’s and whenever it is decided to invest as to marketing the Bolt/Volt, that should step up sales. The 2019-2020 years needs to be on watch as to the network/vehicles combination.

  • Raffi256

    For GM and others it makes more sense to just let Tesla figure everything out and then just clone their business and products once it’s all proven.

    • freedomev

      Except GM did all this in 1999 but let it go for Tesla to pick up and run with it.
      They are not even on track yet to produce 20k/yr.
      If I had it I could sell 100k/yr, 50k just to Fleets, Governments. Another 25k for Taxi and at least 25k, if not 75k for consumers.

      • dave_the_braver

        Well, if you wanted to possibly lose money you could. Perhaps at 100k you could make money … but that wouldn’t allow GM to whine about how its too hard to sell EVs, cause nobody wants them.

        • freedomev

          The Bolt shouldn’t cost them $25k to build, reverse costing it out, so unlikely to lose money on it if they tried at all.
          I’m just taking a break from costing out my new EV for limited production and mine will be profitable on the 3rd sale.
          EVs are simple and now batteries are low cost it is going to be very interesting when my composite EV beats their metal ones badly.

          • dave_the_braver

            Well, they claim they are losing money on everyone… perhaps because most of it is made by LG Chem, and thus costs more than from raw components. $25k sounds low to me. Just the car minus the drive chain and battery is about $20k. So, you would be pushing $35k.

          • freedomev

            Nah. They sell similar size vehicles for $14k list and minus the battery, about the same cost of not cheaper on the EV.
            The battery costs is about $10k added to that.
            So I think $25k is actually generous.

  • dp

    What about government subsidies and tax credits for mass market EVs, the Leaf?

  • http://www.TintDepot.com/ Tint Depot

    intesting info on carb credits in ca

  • Rick Denzien

    GM Killed The Electric Car in the first place, playing & rigging the compliance game in Calli and other states. I am happy to continue driving our Leaf until our Tesla Model 3 is ready. Go Tesla! F.U. GM low life ICE CO!