General Motors is scaling back its electric vehicle and battery production in the U.S. and cutting jobs at key plants as demand for electric cars slows down. The Detroit-based automaker announced on Wednesday that it will reduce production at its electric vehicle plant in Detroit to a single shift starting in January, down from two shifts. This move will cut output by about half and affects models like the Chevrolet Silverado, GMC Sierra, EV Escalade IQ, and the Hummer SUV.
In addition to the production cuts, GM will pause battery cell production at its joint-venture plants in Tennessee and Ohio for around six months starting in January. This pause will lead to temporary layoffs of about 1,550 workers at those battery factories. The Ohio plant, which GM operates with South Korea’s LG Energy Solution, will also see 550 workers laid off indefinitely.
These changes come as the company responds to a drop in near-term electric vehicle demand and an uncertain regulatory environment. Automakers across the U.S. are pulling back on their EV plans after a $7,500 federal tax credit for EV buyers expired. Industry experts expect electric vehicle sales to potentially fall by half in the coming months.
Other car makers like Nissan and Stellantis have canceled future electric vehicle projects, and earlier this month GM itself scrapped production of the electric BrightDrop van, citing slow growth in the commercial EV market.
Sam Fiorani, a vice president at AutoForecast Solutions, predicted more job cuts and reduced EV production in the industry. GM has already lowered its EV sales forecasts and made production cuts earlier this year.
The United Auto Workers union president criticized GM’s decision, especially because the company recently raised its expected annual profits to $13 billion. He emphasized the union’s commitment to pushing for more investment in both electric and traditional vehicle production.
GM also recently cut about 500 white-collar jobs as part of a separate restructuring effort. The company initially set a goal to sell only electric vehicles by 2035 and doubled funding for that push in 2021. But now, CEO Mary Barra says near-term EV adoption will be much slower due to changing government rules and the end of consumer incentives. She expects the company’s electric vehicle losses to shrink starting in 2026.
Earlier this month, GM took a $1.6 billion charge related to changes in its EV plan. Despite the setbacks, GM’s stock had gained over 35% this year, though it fell 1% to $69.19 following the announcement.