General Motors (GM) says it is ramping up production of its diesel pick-up trucks despite the price of the fuel hitting a record high above $6 U.S. a gallon.
The Detroit automaker is moving ahead with the fourth-quarter launch of its new Chevrolet Silverado and GMC Sierra pickup trucks that run on diesel fuel.
General Motors says the two trucks have undergone their first major redesign since 2019 and remain the automaker’s top-selling models globally despite soaring diesel prices this year.
At a media briefing, GM said that despite a run higher in diesel due to the Iran war, it remains the most cost-effective fuel for its full-sized pick-up trucks, which are its most profitable vehicles.
To boost fuel economy, General Motors has installed an improved diesel engine in both the Silverado and Sierra models that can deliver a highway driving range of more than 900 miles.
General Motor’s continued focus on diesel-powered trucks comes as rivals Ford Motor Co. (F) and Stellantis (STLA) switch to gas-electric hybrid models that are fuel efficient and better for the environment.
Management at GM said they are betting on the efficiency of diesel engines over the long run rather than temporary spikes in fuel costs due to geopolitical events such as the Iran war.
Diesel engines have generally provided better highway fuel efficiency than gas engines, which is why trucks typically have diesel engines.
However, the efficiency of diesel engines has been called into question as prices for the fuel reach all-time highs.
Stocks of trucking companies such as Old Dominion Freight Lines (ODFL) and carriers such as American Airlines (AAL) that rely on diesel fuel have sunk in recent weeks.
GM stock has risen 46% in the last 12 months to trade at $86.62 U.S. per share.
