GM Faces Down Fuel Prices With Big Trucks and Bigger Engines

tanding on a dais at a General Motors truck engine plant in Flint, executive chief engineer Mark Dickens plays a recording of the company’s all-new V-8 revving up.

“I never get tired of hearing the engine roar,” says Dickens, who oversaw development of the new Chevrolet Silverado and GMC Sierra pickups that go on sale later this year.

GM never tires of the profits that come from those thirsty pickup trucks, either. Forget about starry-eyed goals to go all electric by 2035 that once anchored Chief Executive Officer Mary Barra’s goal of doubling revenue: The company runs on truck profits, and the all-new versions of the Silverado and Sierra will come with bigger engines and a plan to produce even more of them.

Related: EV Sales Are Booming in Europe With Gasoline at $10 a Gallon

The trouble is timing. GM will be starting production of the trucks and bigger engines just as fuel prices have risen to nearly $5 a gallon and diesel prices hit a record. With a full lineup of hybrid-electric vehicles, including its Tundra pickup, Toyota Motor Corp. is catching up to GM in US market share and threatens to pass America’s largest automaker this year.

If that happens, a big part of Barra’s legacy could well be losing the sales crown to Toyota. Under Barra, who turns 65 this year, GM invested some $35 billion in a dozen electric models and has since written off almost a third of that. Americans weren’t buying them in huge numbers even before the Trump administration eliminated the $7,500 tax credits to help consumers purchase them and also wiped away fuel economy rules that pushed the industry to build more EVs.

While Toyota grows sales with hybrids, GM is relying on the greater fuel economy of diesel engines and adding horsepower to gasoline motors to bring in buyers. The automaker has raised output at its engine factories in Western New York and Ontario, Canada.

GM also plans to add more truck production at a currently idle factory in Lake Orion, Michigan, north of Detroit, trying to build on its position as full-size pickup leader. The factory once was scheduled to make electric versions of the Silverado and Sierra, which would have meant the company had two plants capable of building them. But after selling just 19,000 plug-in trucks last year, GM will convert the facility to make more gasoline pickups and Cadillac Escalade SUVs.

Despite steep fuel prices, Chevrolet Vice President Scott Bell says the company is adding production of V-8 engines and elevated trucks that are raised up for off-road driving because consumers want more than GM can currently build. Those trucks sell at retail and often at high prices. The Silverado Trail Boss version made for off-road driving starts around $55,000.

“We’ve had constraints where we felt like we didn’t have enough capacity to maybe take advantage of some of the market that’s been knocking on our door,” Bell said. “V-8s has been one. That’s been addressed with this investment.”

When it comes to fuel prices, says GM President Mark Reuss, the current spike looks to be more related to geopolitics than a fundamental shift in energy markets that would require the automaker to overhaul its vehicle strategy. He said the company’s new diesel engine will beat hybrid pickups when it comes to fuel economy.

“If we have fuel spikes that become the norm, there’s one answer to that,” Reuss said. “If it’s fuel spikes because of geo conditions, that’s a different answer. If we can beat hybrids, we’re going to do that and I think customers really value that. The fuel economy and efficiency that goes along with the diesel is pretty remarkable.”

Just as Stellantis NV has brought back the Hemi V-8 for its Ram, GM is giving its new motors more horsepower. GM’s has an all-new 6.6-liter V-8 engine that puts out 481 horsepower, an addition of 61 horses. Its heavy-duty work truck gets a giant new diesel engine that will deliver 555 horsepower called the Mongoose, which replaces a smaller engine that puts out 470 horsepower. The fuel economy of the new trucks has not yet been rated by the US Department of Energy.

The trucks will also get a new infotainment system that will allow drivers to use Apple’s CarPlay or Google’s Android Auto on a split screen that also shows key vehicle gauges such as fuel, tire pressure, Super Cruise hands-free driving and towing information. In addition, the system enables the driver to use vehicle functions and phone apps with less toggling between screens.

GM won’t say how much production the company will add, except to call the extra capacity in Orion “significant.”

Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, expects GM to add about 100,000 trucks worth of production. If GM builds them all and doesn’t lower production at a Mexican pickup plant to avoid tariffs, it would be pushing for more than 10% growth. That will be tough to get given the loyalty truck owners tend to have for their brands, he said.

“They’re trying to expand in areas where they’re good, but there isn’t a lot of room for growth,” Fiorani said.

And fuel prices are nibbling at some truck sales, according to research firm Cox Automotive. Full-size truck sales are expected to be down almost 2% year to date when third-quarter sales numbers come in. Mid-sized trucks — which get better fuel economy and can do what some buyers need — are expected to be up by a similar amount.

Top photo: Mary Barra Photographer: Jeff Kowalsky/Bloomberg.