2024 Sierra EV Denali Edition 1
Source: General Motors
MILFORD, Mich. — General Motors’ premium GMC brand wants to become the leader in all-electric truck sales for U.S. consumers as it launches its new electric Sierra pickup.
The Sierra EV joins electric versions of the Hummer, including an SUV and pickup, in GMC’s electric “truck” lineup. The automaker is expecting the Sierra will become GMC’s top seller for its EV lineup as lower-priced variants become available next year. A roughly $100,000 “Edition 1” of the vehicle recently started reaching customers.
“We believe this is a totally different proposition than anything that’s been launched by anybody else before. So, we’re confident about the demand,” Duncan Aldred, global vice president of GMC, told CNBC at GM’s proving grounds in suburban Detroit.
GMC did not disclose a timeline for when the brand expects to lead retail electric truck sales. But to do so, it will have to outsell its sibling Chevrolet Silverado EV as well as competitors from Ford Motor, Rivian Automotive and Tesla, which Motor Intelligence reports led such sales with its Cybertruck in the second quarter.
Aldred said he believes there will be cross-shopping between the Sierra and Cybertruck, but he doesn’t necessarily believe they are primary competitors, despite the vehicles being similarly priced. Citing internal data, he said many Cybertruck buyers already own Teslas, while roughly 80% of GMC’s reservation holders for the Sierra previously had non-GMC vehicles.
“What we know is about 70% of Cybertruck buyers are Tesla owners,” he said during a media event. “So, they’re not necessarily truck buyers, they’re Tesla buyers.”
Developing market
Automakers such as GM rushed to release all-electric pickup trucks, in part because Tesla planned to build such a vehicle. That led to fears that the U.S. EV leader would dominate the truck market, which is crucial to the Detroit automakers, like it did for electric cars.
Duncan Aldred, vice president of Buick-GMC sales for General Motors Co., speaks next to a GMC Sierra Denali HD truck displayed during an event in Chula Vista, California, U.S., on Tuesday, Jan. 22, 2019.
Sandy Huffaker | Bloomberg via Getty Images
But EV adoption has been slower than many expected, and the electric truck market remains in its infancy.
The all-electric pickup truck market was roughly 38,500 vehicles during the first half of the year, including retail and fleet sales, according to Motor Intelligence. That compares with the more than 1 million traditional or hybrid full-size pickup trucks sold this year through June.
Leading all-electric pickup truck sales through June was Ford’s F-150 Lightning at 15,645 vehicles, according to Motor Intelligence. It was followed by the Tesla Cybertruck at nearly 11,600 units during that time, including a segment-leading 8,755 during the second quarter, according to the automotive data and analytics firm.
GMC’s Hummer pickup, which has been slow to ramp up production and sales, was last at less than 1,500 vehicles, including about 1,100 during the second quarter, according to Motor Intelligence.
“This is a very infant market. This is just the baby steps. For General Motors to have confidence that they can be a leader in the space is justified in their history with trucks and their understanding of being able to make a transition to electric vehicles,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility. “The big question now is how quickly consumers [adopt electric trucks], more so than the product attributes.”
Including all-electric SUVs from the brands, which some companies such as GM report under truck sales, Rivian is the clear leader through the first half of the year at more than 22,700 R1S SUV and R1T pickups sold. That compares with GMC’s Hummer SUV and pickup models, with sales of roughly 4,600 units.
Aldred said GM expects to ramp up production of the Sierra EV — including the AT4 off-road and entry-level Elevation models coming next year — faster than the Hummer models that took years. Denali versions of the vehicle are expected to begin production during the fourth quarter, GM said.
The Sierra EV is now GM’s third electric pickup, including the Hummer and a new Chevrolet Silverado that began arriving in dealerships in December.
Chevy vs. GMC
The Sierra EV’s closest competitor is arguably the Chevy Silverado EV. Both are built on GM’s “Ultium” vehicle platform and share many parts, features and performance characteristics.
The Detroit automaker has differentiated the vehicles through their interior and exterior designs, as well as brand personalities.
“Chevrolet really focused on the fleet side. We’re really focused on the retail side, same as on [internal combustion engine] trucks. When you look at it, the EV truck space is a premium space,” Aldred said.
The all-electric Chevrolet Silverado at the New York Auto Show, April 13, 2022.
Scott Mlyn | CNBC
The Silverado currently has a sporty, pricey edition for about $96,500 and a work truck, meant for fleet and commercial customers, that starts at roughly $67,000.
The Sierra is more refined and luxurious than its Chevrolet counterpart: It has open pore wood, larger screens, standard hands-free highway Super Cruise driving, GMC’s “crab mode” with four-wheel steering and other features.
“General Motors has been good with their differentiation between GMC and Chevrolet,” S&P Global’s Brinley said. “The GMC Sierra and the Chevrolet Silverado EVs look different enough from each other, and General Motors has worked those two customers very well for decades. They understand what they need to do to make something appeal to a GMC buyer versus a Chevrolet buyer, and that they’re very subtly different.”
2024 Sierra EV Denali Edition 1
Source: General Motors
Both vehicles have an EPA-rated range of 440 miles and offer up to 754 horsepower and 785 pound-feet of torque. Important for many truck customers, they also tow up to 10,000 pounds and can charge for 100 miles in roughly 10 minutes with a DC Fast Charger.
A unique feature of the Silverado and Sierra EVs compared with others is the capability of a “midgate,” in which the back seats of the vehicle fold down and the back glass can come out to create a nearly 11-foot-long truck bed and large cargo area.
Building on the GMC brand
The Sierra EV, including the Denali edition, is expected to continue to assist GMC with its pricing power and reputation as a premium truck brand, according to Patrick Finnegan, senior marketing manager for GMC trucks and SUVs.
GMC has grown its average transaction prices and high-end models thanks to the newer off-road AT4 vehicles as well as Denali, which is celebrating its 25th year as a GMC sub-brand.
For example, GMC’s traditional Sierra pickup truck has an average transaction price of roughly $60,000. That includes the Denali models at about $71,000, and a Denali “Ultimate” model at $78,500, according to the company.
2024 Sierra EV Denali Edition 1
Source: General Motors
GM has not released pricing for the electric GMC Sierra Denali, AT4 and Elevation models that will follow the 2,500-unit “Edition 1” models. But Aldred did say the Sierra could potentially be eligible for up to $7,500 federal tax credits, which would mean it would have a price of less than $80,000.
Denali models have grown from simple tweaks differentiating them from other vehicles to offering their own interiors, parts and features. The vehicles still largely share the same “bones” but offer more luxurious features and materials.
About 34% of GMC’s retail sales are Denali models, GMC said. That’s up from 18% a decade ago and 30% in 2019. The sales have assisted GMC in what’s expected to be seven consecutive years of growth for the brand.
“This is going to continue to help protect our space in that premium average transaction price space. It’s going to help us open the door to new customers,” Finnegan said. “We intend to be the retail leader in the electric vehicle truck space, and we’re going to have a fuller breadth of product to really help us achieve that.”
