General Motors' full-size SUVs are V8-powered money machines
GM's electric future will be paid for by the pickups and SUVs it sells today
General Motors unveiled the Cadillac Lyriq. FOX Business’ Grady Trimble with more.
General Motors may be planning for an all-electric future, but it will pay for it with the trucks it's building today.
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After the introduction of its redesigned full-size pickups in 2019, the automaker has \started building a new lineup of full-size SUVs.
The 2021 Chevrolet Tahoe and Suburban were first out of the retooled General Motors Arlington, Texas, factory in June and will be joined by the GMC Yukon and Cadillac Escalade in the coming weeks.
Chevrolet Tahoe (Courtesy: General Motors)
The trucks absolutely dominate the segment. Their combined sales amounted to more than 263,214 units in 2019, compared to the Ford Expedition and Lincoln Navigator’s tally of 105,078.
Starting prices for the Chevys range from $50,295 to $72,895, depending on the model, but options can push them to more than $80,000. According to Edmunds, the average transaction price for full-size SUVs is more than $63,000, which means GM’s lineup represents over $16 billion in annual revenue with a profit margin as high as 30 percent, Barclays estimates.
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The all-new models are larger than the ones they replace and are differentiated from the pickups they are based on with upscale interiors and a fully-independent suspension system to give them a more crossover-like ride, which can be upgraded with computer-controlled shocks and an adjustable air suspension system.
The Tahoe and Suburban are launching with two V8 gasoline engine options rated at 18 mpg combined, but a turbodiesel inline-6-cylinder that promises improved fuel economy will be added to the lineup later in the year.
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While there are currently no plans for any electric versions, GM will be leveraging its strength in the full-size truck segment by introducing the GMC HUMMER EV next year as the first of its next-generation Ultium battery-powered models, which is part of a $20 billion investment in electric vehicles that’s been earmarked through 2025.