General Motors Slashes 1,700+ Jobs as Electric Vehicle Momentum Stalls
GM Hits Brakes Hard on EV Workforce
The Cutting Room Floor
General Motors just handed pink slips to over 1,700 workers—a brutal response to the electric vehicle sector's unexpected slowdown. Not exactly the green transition investors were banking on.
Factory Lines Go Quiet
Assembly lines that once hummed with EV production now stand eerily silent. The automaker's aggressive electrification strategy meets cold, hard economic reality.
Market Realities Bite
While Wall Street dreamed of endless EV growth, consumer demand tells a different story. GM's massive cutback reveals the widening gap between automotive aspirations and market actualities.
Another case of corporate optimism crashing into the pesky constraints of supply, demand, and that other minor detail—profitability. But hey, at least the stock buybacks remain untouched.
Federal credit expiration sends EV demand down
The layoffs followed a major change in federal support for electric vehicles. After September, the $7,500 federal incentive for EV purchases expired. Before it ended, buyers rushed to secure the credit, creating a short-term spike in EV sales.
Many automakers, including General Motors, reported record plug-in sales in the third quarter, and GM said its EV sales more than doubled compared to the same quarter the year before.
But once the credit disappeared, the momentum dropped. Research firms tracking sales reported that EVs made up less than 6% of new car sales in October, compared to almost 13% in September.
That was the lowest share since 2022. Stephanie Valdez Streaty, an industry analyst at Cox Automotive, said on a webinar that there is still opportunity for EVs to grow, but the market is entering a slower phase.
Stephanie said EV sales may settle at 8% to 9% of total sales in 2025, before rising again in 2027, when new and less expensive EV models from companies like Rivian, Slate, and Ford hit the market.
Investors push automakers back toward gas-powered vehicles
The shift in buying patterns has reshaped how automakers speak to investors. Mary Barra, the CEO of GM, told investors last week: “We’re going to build to consumer demand. We’re not going to overbuild,” while adding that “electric vehicles remain our North Star.”
At the same time, the company’s CFO Paul Jacobson said on CNBC that EVs are still part of GM’s long-term plan, but “we do have some structural changes that we need to do to make sure that we lower the cost of producing those vehicles.”
General Motors’s most recent earnings report also showed a $1.6 billion financial impact tied to EV production not scaling the way the company planned. That financial strain, combined with weaker near-term demand, is what triggered the reassessment of its EV manufacturing schedule.
While GM is slowing EV production, Ford is doing so as well. Ford paused production of its F-150 Lightning after a fire at a supplier facility disrupted aluminum supply.
Meanwhile, Wall Street firms are already preparing for internal-combustion models to dominate longer. Deutsche Bank said in a recent investor note: “The narrative becomes much more centered around ICE for longer.”
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