General Motors has made its plans a reality by terminating the production of North America’s bestselling electric car, the Chevy Volt EV. The subsidiary brand of General Motors has revealed that it intends to terminate the production of the electric model in 2019 and has cited many reasons to justify the bold move. The reports in the media only revealed that the company was planning to do away with models that it feels are not doing well in the market. As such, people did not expect the company to terminate the production of its bestselling electric car. The company is in advanced stages of cutting down its production costs and reducing the number of its employee. After the company’s presser, it is now clear that one of the companies’ casualties is the Chevrolet Volt. It is not a new phenomenon for General Motors to stop producing some of its leading brands citing one reason or the other. As a result, the company’s move to stop the production of the Chevrolet Volt is not that surprising. The manufacturer claims that the bold step will allow it to streamline its manufacturing processes and align its operations with the current market needs. The company also argues that it intend to launch the production of affordable electric vehicles with extended mileage.
The Chevy Volt was the first plug-in model for Chevrolet in the North American market with the model being launched into the market in mid-2010. Although the model was a unique electric car that was expected to break into the American market easily, it has been struggling since its inception, recording unimpressive sales for several years now. The model is a hybrid that has been at odds with the dynamics of the market. This is because many people looking for electric vehicles today are opting for pure electric cars from other manufacturers. The Chevy Bolt EV has overtaken the fortunes the Volt had attracted over the years and this could be one of the motivating factors in the decision to terminate the production of the model. Another motivation for the manufacturer could be the fact that the Volt’s $ 7,500 credits will expire in 2019, and this could lead to a further reduction in sales. As part of Chevrolet’s plans to overcome these challenges, they have decided to do away with the model entirely as part of its restructuring process.
Although Chevrolet was planning to give the Volt a facelift in 2020, the current news implies that there was a change of decision by the company. The Volt has not undergone any significant remodeling since the 2015 upgrade and the scheduled facelift seemed like it was the perfect time for the improvement. All those plans, however, are now under the water. The manufacturer believes that the model has no potential to change its fortunes and there is a possibility that it would launch a crossover SUV to replace the Volt as a strategy to penetrate the current market where many buyers now prefer to drive big cars.
A Unique History
Although it might seem like the Chevrolet Volt did not meet the manufacturer’s expectation on total sales, it is worth noting that the model was unique and had its own breakthroughs. The model, for instance, was named one of the best electric car and hybrid models in the American market by the Green Car Reports. This award drove its sales up for a while although the effects did not last for long. Another factor that led to the initial achievements of the model is that when it was introduced into the market in 2010, there were limited plug-in vehicles in the market and the few that we available were too expensive for the average citizens. Chevrolet estimates that by discontinuing the production of a number of its brands, it will successfully reduce its salaried workforce by 15 percent. The figure stems from estimates that suggest terminating the production of the Chevy Volt and other brands will allow the company to cut off a quarter of its employees and save up to $6 billion in expenses. In the past year, General Motors recorded a 12 percent decrease in sales for the mid-sized sedans although it recorded a significant increase in the sales of crossovers and SUVs.
Although the company plans to shut shown what it refers to as ‘idle plants’, the whole process is likely to be challenging, especially due to the opposition the move is facing from workers’ unions. For instance, Canada’s Unifor Union has already raised an objection to the plans arguing that the move will affect many of its members who work at one of the plants. As a result, the firm will need to revise its approach and launch a proper discussion into how it will implement its plans.