Ever Wonder How Much Profit GM Makes On Tahoe/Suburban? A Lot!
GM’s Chevy Tahoe and Suburban full-size SUVs are just now trickling into dealerships. The coronavirus pushed back GM’s schedules but it is full steam ahead right now. The GMC Yukon and Cadillac Escalade are soon to follow. These are the real moneymakers for GM. combined with the Silverado and Sierra they are funding all of GM’s electric future. Did you ever wonder how much GM makes on the Tahoe and Suburban? Well, it ends up being a lot!
Edmunds pegged the average price of these GM SUVs at $63,000
The full-size GM SUVs sold almost 265,000 units last year. Compare that to Ford’s Expedition and Lincoln’s Navigator which combined sold a bit over 100,000 units. While you can squeak into one of these SUVs for slightly more than 50 Gs, they can end up being more than $80,000 with options.
So, Edmunds pegged the average price of these GM SUVs at $63,000 for discussion. When you factor that over the number of SUVs sold GM is making billions of dollars. And the margin? According to Barclays, it has estimated it to be 30%. In all the profit comes out to $16 billion in yearly revenue.
Remember, this is only from full-size GM SUVs. Also, remember that they are different from the garden-variety full-size pickups. The interiors and a big upgrade from a base pickup. And they also feature fully independent suspensions. Add to that computer-controlled shock and an adjustable air suspension and there is more content in these SUVs. That translates to more cost to GM.
Missing from the full-size SUV lineup is an all-electric choice
What’s missing from the full-size SUV lineup is an all-electric choice. There are a lot of EV startups that are vying for that slice of the market and GM knows that. This is why it is thrashing to introduce the new GMC Hummer EV. Hummer will be the EV arm of GMC. It is scheduled to make its debut in 2021.
GM wants the Hummer to be the first vehicle to feature its Ultium battery power. It has invested over $20 billion in a bid to dominate the EV market through 2025. It is a formidable opponent to Tesla though Tesla has been delinquent in fielding a full-size truck or SUV. Of course, the Cybertruck is also slated for its debut in 2021.
But the bottom line is that GM’s current new crop of trucks and SUVs will be bankrolling its future EV pursuits. We really don’t know how its first step will compare to the Cybertrucks, and Rivians and Lordstown entries until we can compare them side by side. That looks like it won’t be until later in 2021. But we are anxious to make those comparisons to see what all of the hype and development and investments have wrought.