GM doubles down on big Suv’s to pay for the future of electric cars

DETROIT (Reuters) – General Motors Co. (GM.(N), on Tuesday unveiled the first of a new generation of large sport utility vehicles, designed to allow you to withdraw the cash to pay for an electric vehicle, the automaker promises for the future.

FILE PHOTO: a GM logo is seen at the General Motors Lansing Grand River Plant in Lansing, Mich., October 26, 2015. The photo was taken from the 26th of October. REUTERS/Rebecca Cook)

The 2021 Chevrolet Tahoe and Suburban to be officially unveiled at the home of the Detroit Red Wings, ice hockey team based in the city of Detroit, the largest passenger cars available on the market. Powered by six-cylinder petrol engines, six-cylinder diesel engines of the car will be assembled in Texas, which is where many of them are going to be sold.

GM Chief Executive Mary Barra told analysts in October that GM will have to invest more in electric cars than gas-powered models over the next five years.

This is because, in the past five years, GM has invested heavily in the expansion of the production capacity and the improvement of the features, infotainment technology, and the ride quality is the biggest pick-up trucks and sport utility vehicles.

GM and Detroit rivals Ford Motor Co(F. N) and Fiat Chrysler automobiles NV’s (FCHA.MI, to do the same, even if they do promise to have more electrified vehicles for the future.

Detroit’s automakers are doubling down on the big Suv’s for one simple reason: It’s well worth the effort.

Consumers in the united states, the hand-over of substantial premiums for the largest of Suv’s. The average Tahoe was sold for $57,414 in November, according to data from Truecar/Automotive Lease Guide. With the average Ford Expedition sold for more than $64,000. GM’s including Cadillac escalades, as well as derivatives of the Tahoe and the suburban are the most expensive of all of the selling for an average of more than $86,000 in November, according to Truecar.

The prices are high, but will the Arlington, Texas plant that builds GM’s biggest Suv’s available 24 hours a day.

Executives and analysts say, the variable profit margins on large Suvs can be as high as 30%, or more than $15,000 on a car. Barclays capital estimated in a large pick-up trucks and sport utility vehicles, accounted for 72 percent of GM’s North American profits in 2018 and beyond.

The GM is not free to fuel economy estimates for the new Suvs. US fuel economy regulations to encourage automakers to make a great sport utility that’s even better. Under the current U.S. vehicle CO2 emissions standards set by the Obama administration, a vehicle which has a larger “carbon footprint”, because it has been a long time and have a easier number of kilometres travelled and the CO2 emission targets to be met.

On average, the footprints of the vehicles it sold in the United States has increased by 2% from 2008 to 2017, the us environmental protection agency reported earlier this year.

The US President, Donald Trump has said that he would like to ease with the vehicle CO2 standards, but has not released a final plan. GM has sided with Trump in the fuel economy policy in a dispute with California, which is charged with the maintenance of the stronger, more Obama-era standards.

GM owns close to 70% of the US’s large sports utility market in North America, with six of the models – the Chevrolet Tahoe and Suburban, GMC Yukon and Yukon XL and Cadillac Escalade and Escalade ESV. In total, GM sold 238,946 of the hands-on tools to the end of November, according to Automotive News. That’s less than 1% from the year-ago period.

GM faces tougher competition in the future. Ford has boosted the sales of the competing Ford Expedition and Lincoln Navigator, the big utilities were up by 45% through Feb. 30 to 93,487 vehicles. Fiat Chrysler automobiles NV, has said that it plans to launch a new Grand Wagoneer in 2021 to compete with GM and Ford models, as well as a few Asian and European rivals in the segment such as the Nissan Armada, and Toyota Sequoia.

Reporting By Joe White; Editing by Cynthia Osterman

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