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"EVs to be the most disruptive car category since Model T Ford" - UBS

Wed 07 June 2017 | Back to news list

A practical analysis of the Chevrolet Bolt by UBS team found that the car's electric powertrain was $4,600 cheaper to produce than previously estimated, “with much cost reduction potential left.” UBS extrapolated its findings about the Bolt's production costs to make a bold prophecy: EVs will prove to be “the most disruptive car category since the Model T Ford.”

UBS’s main goal was to estimate GM’s cost to build the $37,000 vehicle. Despite the cost reduction potential, UBS says that GM is currently losing money on the Bolt. “We estimate that GM loses $7,400 in earnings before interest and tax on every Bolt sold today, mainly due to a lack of scale.” 

This figure is a little under what other industry observers have estimated. However, UBS’s findings imply that, if GM could squeeze out some costs and increase the scale of production, it could be earning a profit on the Bolt before long.

UBS predicts that “total cost of consumer ownership can reach parity with combustion engines from 2018.” EVs will still carry higher sticker prices, but when the savings on fuel and maintenance are considered, they will be cheaper. UBS expects this price parity to be reached first in Europe, where petrol prices are higher, and in the US several years later.

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