The difference between a good company and a great one can be as small as admitting when you're wrong. It's all too common for companies to refuse to admit mistakes, or even double down on being wrong. That isn't the case with General Motors (GM 0.96%) after it originally planned to discontinue the Chevrolet Bolt electric vehicle (EV). Armed with new information and changing consumer demand, the automaker adjusted its strategy, and it could end up paying off big.
What's the story?
Originally, GM planned to send the Chevrolet Bolt off into the sunset to join a list of other discontinued models never to be seen again. The plan was to launch a list of newly designed EVs focused on entry-level segments.
The kicker was that this plan was going to cost around $5 billion, and considering all the pullbacks companies have done with their EV investments, GM decided to adjust its strategy. It decided it would rather revamp the Chevrolet Bolt EV rather than kill it off after 2023.
Best of both worlds
The next-generation Chevrolet Bolt EV will be North America's first Ultium-based model to use lithium-iron phosphate battery cells (LFP). Beyond using its improved Ultium platform and freshest software, the Bolt will include charging ports that will enable it to use Tesla's Supercharger network.
The adjusted strategy will enable GM to get to market roughly two years faster and save the company billions, while offering a better driving, charging, and ownership experience, at a lower price point.
It couldn't come at a better time. The EV market appears saturated at high-end price points, with demand waning and customers pleading for more affordable EV options. Drastically reducing price points on EVs will be the next step to unlocking mainstream customer demand -- a point the industry desperately needs to reach.
Cross-town rival
GM's revamped Bolt is expected to launch in 2025. That could not only prove important to reaching people wanting more affordable options, it could help fend off Ford Motor Company's (F +0.00%) secret gamble on developing a low-cost EV platform.
During Ford's fourth-quarter conference call, CEO Jim Farley noted that the company made a bet in silence two years ago to begin developing a low-cost EV platform, a project that was detached from Ford's main operations.
It's a move Ford is glad it made. The company lost roughly $47,000 per EV during Q4 2023, especially with an eye on cheaper Chinese models coming to compete sooner rather than later.
Is GM a buy?
GM has been doing a lot of things right over the past decade, but its struggles with driverless tech ambitions and Cruise, along with waning EV industry demand, has sent its stock price to a paltry price-to-earnings ratio of 5.4 times.
If GM continues to drive profits through its traditional business dominated by trucks and SUVs, while restarting its Cruise operations, and the Bolt provides a welcomed jolt to its EV sales, it could prove a great buy at these levels for long-term investors.
