As global competition in the electric vehicle market intensifies, and domestic demand for electric vehicles in the United States continues to slump, General Motors , which once had ambitious plans for its electric vehicle business just a few years ago, is facing a crisis. It seems that they have now begun to gradually abandon the transformation.
On Wednesday, Eastern Time, General Motors announced a series of electric vehicles and batteries. The factory shutdown and layoffs mark a further contraction in the company's electric vehicle business.
Is GM giving up its "electric" dream?
General Motors said it will cut U.S. electric vehicle and battery production due to a sharp decline in demand for its electric vehicles and batteries , including 1,200 jobs at its electric vehicle plant in Detroit and 550 jobs at its battery plant in Ohio.
General Motors announced it will suspend production at its two joint venture battery plants in Tennessee and Ohio in January for approximately six months. The company will also temporarily lay off about 1,550 employees at these two battery plants.
Additionally, at its Ohio plant, General Motors announced it will lay off 550 employees indefinitely. The plant is jointly operated by General Motors and South Korea's LG Energy Solutions.
General Motors stated that the layoffs were "a response to the slowdown in the adoption of electric vehicles in the U.S. in the short term and the changing regulatory environment."
Back in 2021, General Motors was ambitious, stating its plan to convert all new cars to electric vehicles by 2035 and investing heavily in this endeavor. However, since then, its investment in electric vehicles has been steadily decreasing.
Earlier this year, General Motors cut its electric vehicle sales forecasts and has repeatedly scaled back its plans for other electric vehicle production.
General Motors CEO Mary Barra said last week:
"With the regulatory framework constantly changing and the end of federal consumer incentives, it is clear that the adoption rate of electric vehicles will be far lower than originally planned in the short term."
She added that General Motors expects to reduce losses in its electric vehicle business in 2026 and beyond.
Demand for electric vehicles in the United States declines
One of the regulatory changes GM cited was the elimination of US government subsidies for electric vehicles. On September 30th, the US federal government's $7,500 tax credit for electric vehicle buyers officially expired. US automakers generally expect a significant drop in demand driven by US electric vehicle consumers.
This summer, electric vehicle sales in the United States had already reached 10% of the overall auto market, but some industry executives predict that electric vehicle sales may drop by half in the coming months.
Against this backdrop, Nissan, Stellantis, and other automakers have cancelled plans to launch electric vehicle models in the U.S. market in the future.
Sam Fiorani, vice president of research firm AutoForecast Solutions, said he expects the U.S. auto industry to... Electric vehicle jobs will decrease further, and “electric vehicle production will be lower than in the past few years, while prices will rise.”
Shawn Fain, president of the United Auto Workers, criticized General Motors' layoffs.
He pointed out that the company raised its expected annual profit to $13 billion this month, which in itself comes at the cost of workers losing their jobs. Fine also stated, "The United Auto Workers will continue to advocate for increased investment from General Motors and other companies in the production of internal combustion engines and electric vehicles."
Last week, General Motors also announced that it would cut about 500 white-collar jobs.
(Article source: CLS)
