Why Is GM's Modernization Push Killing One of Its Most Innovative Cars?

Automotive giant General Motors’ massive reorganization and push to electrification is ironically shuttering production on one of its signature hybrids, the Chevy Volt. The Volt was notably the the first production plug-in that was produced and sold in the United States when it first went on sale in 2010, per GreenCarReports.

After announcing a company restructuring that would wind up in cutting nearly 15,000 jobs, a GM spokesperson confirmed to Inverse that production of the Volt will end on March 2019. They did not provide any details regarding whether Chevrolet would be introducing other hybrid cars to compete with the likes of the Toyota Prius. But the company appears to be shifting gears toward fully electric vehicles and other strong-sellers like pickup trucks.

“GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” states the announcement. “As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.”

The company is justifying scrapping a hybrid model as part of an effort to double down on truly emission-free cars. However, the decision to completely remove a low-emissions option from Chevy’s primarily fossil-fuel burning lineup has been criticized as sending a “bit of a mixed message” by industry observers like Roadshow’s Tim Stevens. It also put the future of five GM assembly plants into question.

What GM’s Restructuring Means for the Future of Electric

Factories in Ontario, Detroit, Ohio, Maryland, and Michigan will see slow-downs or halts in production in 2019. Reuters reported that all of the aforementioned factories “build slow-selling cars,” which could have been the nail in the coffin for the Chevy Volt.

GM reported that Volt sales were lagging behind the Prius, Hyundai Ioniq, and Honda Clarity, as of the second quarter of 2018. Instead of trying to make up ground, GM is shifting focus to its “crossovers, SUVs and trucks.”

This aligns with a longstanding headwind for electric vehicles and makers of compact cars, that most of the demand for new cars is for gas guzzling SUVs. Forecasters LMC Automotive recently told Quartz that SUVs alone could account for half of automotive sales by 2020. The outsize demand for bigger cars obviously make it even harder for auto-makers to tackle the problems facing EVs, for example range anxiety.

This helps explain why Tesla has already begun hyping the design for a yet-to-be-unveiled pickup truck with a “cyberpunk” feel, and the heretofore secretive EV start-up Rivian decided to skip the compact entirely and go straight to developing electric SUVs and pick-up trucks. Chevy may be particularly susceptible to this headwind, as its chiefly known for its Silverado trucks.

GM chevrolet electric hybrid cars
The Volt and the Bolt EV are the only two vehicles under Chevrolet's "Electric" tab.

Then again, reorganizations of this size are also par for the course in the rapidly changing, skills and labor intensive automotive industry. High manufacturing costs, infinitely complex supply chains, and intricate financing arrangements often needed to sell them to consumers mean that companies like GM often pivot their business to survive, a point that moon-shot aficionado Elon Musk recently made on ReCode’s Kara Swisher’s podcast.

“Making a car company successful is monumentally difficult,” Musk said. “There have been many attempts to create a car company and they have all failed, even the ones that have had a strong base of customers.”

But it’s still a notable mixed message that the company’s push toward modernization required axing its signature hybrid. Once these changes take effect, the Chevy Bolt EV will be the only vehicle in production under the brand’s “Electric” tab, and one of the announced closures includes a Baltimore, MD facility that produces electric motors, per a Green Car Reports report.