GMC aims for electric truck leadership against Tesla, Ford and Rivian

MILFORD, Michigan — from General Motors Premium brand GMC aims to become a leader in all-electric pickup truck sales to American consumers with the launch of its new Sierra electric pickup.

The Sierra EV joins electric versions of the Hummer, which include an SUV and pickup truck, in GMC’s electric “truck” lineup. The automaker expects the Sierra to become GMC’s best-selling vehicle in its EV lineup as lower-priced variants become available next year. Recently, a roughly $100,000 “Edition 1” of the vehicle began reaching customers.

“We think this is a completely different proposition than anything any company has done before, so we're confident in the demand,” Duncan Aldred, GMC's global vice president, told CNBC at GM's proving grounds in suburban Detroit.

GMC did not reveal a timeline for when the brand expects to lead retail sales of electric pickup trucks. But to do so, it will have to outsell its Chevrolet Silverado EV sibling, as well as its competitors. Ford Engine, Rivian Automotive and Teslawhich, according to Motor Intelligence, led these sales with its Cybertruck in the second quarter.

Aldred said he thinks there will be some crossover competition between the Sierra and Cybertruck, but he doesn't necessarily think they're primary competitors, even though the vehicles are similarly priced. Citing internal data, he said many Cybertruck buyers already own Tesla vehicles, while about 80% of GMC reservation holders for the Sierra previously owned non-GMC vehicles.

“What we know is that about 70% of Cybertruck buyers are Tesla owners,” he said during a media event. “So they're not necessarily pickup truck buyers, they're Tesla buyers.”

Automakers like GM rushed to roll out all-electric pickup trucks, in part because Tesla planned to build such a vehicle. That raised fears that the U.S. leader in electric vehicles would dominate the pickup truck market — which is crucial for Detroit automakers — as it did with electric cars.

But adoption of electric vehicles has been slower than many expected, and the electric truck market is still in its early days.

According to Motor Intelligence, the all-electric pickup truck market reached about 38,500 vehicles during the first half of the year, including retail and fleet sales. This compares to the more than 1 million full-size traditional or hybrid pickup trucks sold this year through June.

According to Motor Intelligence, the top-selling all-electric pickup truck in June was Ford’s F-150 Lightning with 15,645 units, followed by Tesla’s Cybertruck with nearly 11,600 units during that period, including a segment-high 8,755 units during the second quarter.

GMC's Hummer pickup, which has been slow to ramp up production and sales, ranked last at fewer than 1,500 vehicles, including about 1,100 during the second quarter, according to Motor Intelligence.

“This is a very nascent market. We're just getting started. The fact that General Motors is confident it can be a leader in this space is justified by its history with trucks and its understanding that it can transition to electric vehicles,” said Stephanie Brinley, principal automotive analyst for S&P Global Mobility. “The big question now is how quickly consumers will embrace it.” [adopt electric trucks]more than the attributes of the product.”

If you include the brands’ all-electric SUVs, which some companies like GM include in their truck sales reports, Rivian is the clear leader in the first half of the year with more than 22,700 R1S SUVs and R1T trucks sold. That compares to GMC’s Hummer SUV and truck models, which sold about 4,600 units.

Aldred said GM expects to ramp up production of the Sierra EV — including the entry-level Elevation and AT4 off-road models coming next year — faster than Hummer models, which took years to produce. Denali versions of the vehicle are expected to go into production during the fourth quarter, GM said.

The Sierra EV is now GM's third electric pickup, following the Hummer and a new Chevrolet Silverado that began arriving in dealerships in December.

The Sierra EV's closest competitor is undoubtedly 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 its vehicles through their interior and exterior designs, as well as brand personalities.

“Chevrolet really focused on the fleet sector. We are very focused on the retail sector, as well as on [internal combustion engine] “When you look at it, the electric truck space is a prime space,” Aldred said.

The Silverado currently has a pricey sporty edition for about $96,500 and a work truck, aimed at fleets and commercial customers, that starts at about $67,000.

The Sierra is more refined and luxurious than its Chevrolet counterpart: It has open-pore wood, larger screens, standard hands-free Super Cruiser driving on the highway, GMC's “crab mode” with four-wheel steering and other features.

“General Motors has been good about differentiating between GMC and Chevrolet,” said S&P Global's Brinley. “The GMC Sierra and Chevrolet Silverado EVs look quite different from each other, and General Motors has worked very well with those two customers for decades. They understand what they need to do to make something appealing to a GMC buyer versus a Chevrolet buyer, and that they are very subtly different.”

Both vehicles have an EPA-estimated range of 440 miles and offer up to 754 horsepower and 785 pound-feet of torque. Importantly for many pickup truck customers, they can also tow up to 10,000 pounds and can charge for 100 miles in about 10 minutes with a DC fast charger.

A unique feature of the Silverado and Sierra electric vehicles compared to others is the capability of a “midgate,” in which the vehicle's rear seats fold down and the rear glass can come out to create a nearly 11-foot-long truck bed and large cargo area.

The Sierra EV, including the Denali edition, is expected to continue to help 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 boosted its average transaction prices and high-end models thanks to the new AT4 SUVs as well as Denali, which is celebrating its 25th anniversary as a GMC sub-brand.

For example, GMC's traditional Sierra pickup has an average transaction price of about $60,000. That includes Denali models, which cost about $71,000, and a Denali “Ultimate” model, which costs $78,500, according to the company.

GM hasn't released pricing for the electric GMC Sierra Denali, AT4 and Elevation models that will follow the 2,500-unit “Edition 1” models. But Aldred said the Sierra could potentially be eligible for federal tax credits of up to $7,500, which would mean it would be priced under $80,000.

Denali models have evolved from simple tweaks that differentiated them from other vehicles to offering their own interiors, parts and features. The vehicles still largely share the same “body” but offer more luxurious features and materials.

GMC said about 34% of GMC retail sales are Denali models. That's up from 18% a decade ago and 30% in 2019. The sales have helped GMC on what is 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 truck space and we’re going to have a broader range of products to really help us achieve that.”