GM Lays off 1,000 Globally, Likely Due to Expected Federal EV Funding Cuts

The turmoil from the incoming administration’s likely cuts to federal EV tax credits and subsidies has already begun. The 2024 U.S. election results, with Republicans taking unified control of the Presidency and Congress, signal potential shifts in the federal funding landscape for EVs and clean energy policies, with a cut of the federal EV tax credit expected. Efforts from the new administration to scale back EV industry subsidies and the Inflation Reduction Act (IRA) incentives for EVs and clean energy haven’t been announced yet, but are likely to begin soon.

General Motors (GM) announced layoffs affecting 1,000 employees globally, with most of the cuts targeting its Global Tech Center in Warren, Michigan. This decision impacts primarily salaried employees, though some hourly positions will also be affected. The company has not yet detailed the specifics of the hourly job reductions.

GM’s layoffs came a day after a report from Reuters that President-elect Donald Trump, preparing for a second term that starts in January, is expected to end the $7,500 consumer tax credit for electric-vehicle purchases, with the support of Tesla CEO Elon Musk. Analysts say cutting the credit will hurt Tesla’s competitors, such as GM, the most.

The layoffs are part of broader industry adjustments as U.S. automakers navigate the challenges of slower-than-anticipated electric vehicle (EV) adoption, reduced consumer demand compared to pre-pandemic levels (down by roughly 1 million vehicles), and uncertainty over federal policy changes that could impact America’s EV industry and automotive sector.

This development underscores the ongoing struggles automakers face in balancing investments in EV technology with fluctuating market dynamics and production costs. GM’s decision reflects a cautious approach to restructuring and resource allocation amid these industry pressures.

Layoffs are “not a tremendous surprise, given the global, intense competition that a company like General Motors is in right now,” Glenn Stevens, executive director of statewide auto advocacy group MICHAuto, told Bridge Michigan.

Stevens said Chinese automakers now produce enough vehicles to fulfill about half of the world’s new-car demand, and these vehicles are developed very quickly, much faster than in the US.

“Any company in this market, this global market, has to have speed,” Stevens said. “You have to be as efficient and streamlined, and have the right people in the right positions, to execute like that. And that is what you’re hearing from General Motors today.”

The layoffs at GM were made “in order to win this competitive market,” spokesperson Kevin Kelly said in a statement sent to Bridge Michigan.

“This is an unmistakable sign the auto industry is slowing,” said Patrick Anderson, CEO of Anderson Economic Group in East Lansing. “And that consumers are expressing some reluctance about buying the higher-priced cars, notably electric cars.

“Manufacturers are cutting back on their costs in anticipation of a further slowdown,” Anderson continued, “or even a recession.”

General Motors (GM) has indicated that its electric vehicles (EVs) are nearing profitability, but the company still incurs losses on every EV sold. In response, GM has slowed its EV product pipeline and paused operations at its Orion Assembly plant, a facility crucial to EV production.

This strategic adjustment reflects the challenges of scaling EV production while managing costs and demand. Despite significant investments in electrification, GM is grappling with the reality of slower-than-expected consumer adoption and the high upfront costs associated with battery technology and manufacturing.

“The regulatory environment will keep getting tougher,” CEO Mary Barra wrote to shareholders on Oct. 22, hinting at future cost-cutting. “That’s why we are focused on optimizing our (internal combustible engine vehicle) margins and working to make our EVs profitable … as quickly as possible.”

General Motors (GM), despite the recent layoffs, maintains a strong presence at its Warren Tech Center, where its highest concentration of software and related-services employees work. Even after cutting 1,000 jobs globally, GM still lists over 60 open positions at the facility, signaling ongoing demand for specialized talent in key areas.

As Michigan’s second-most valuable publicly traded company, GM boasts a market capitalization of $63.3 billion and has seen its stock hit a year-long high, peaking at over $59 per share on Thursday. This performance reflects investor confidence in GM’s strategic adjustments, including cost-cutting measures that helped drive a 10.5% year-over-year increase in profitability during Q3 2024.

Globally, GM employs approximately 163,000 workers, including 25,000 in southeast Michigan. While the company has not disclosed the breakdown between salaried and hourly employees, the layoffs and hiring at the Tech Center illustrate its focus on reshaping its workforce to meet evolving business needs and market demands.

EVinfo.net Urges Your Support to Save Federal EV Tax Credit and EV Subsidies

At EVinfo.net, we urge you to show support for keeping the federal EV tax credit and the IRA’s EV and clean energy subsidies intact. Contact your government representatives and keep our economy strong with EV production and adoption.

The Electrification Coalition, a non-profit focused on support of clean transportation, released the statement below, which we fully agree with.

The Electrification Coalition said on it’s Linkedin page:

“In response to recent reports that the incoming Trump administration may attempt to end the federal electric vehicle (EV) tax credit:

Businesses and consumers are increasingly shifting to EVs, accounting for nearly 10 percent of new vehicles in the U.S. and an even faster rate of adoption around the world. The U.S. automotive industry must remain competitive with the rest of the world, or we risk losing critical global market share. We have not moved as quickly as countries like China, which has had a head start on EV manufacturing and adoption.

The federal EV tax credit requires qualified vehicle manufacturers to meet content and assembly requirements that are critical to stimulating American manufacturing and supply chains, including billions in announced private-sector investments and hundreds of thousands of American jobs, including vehicle manufacturing in Michigan, battery manufacturing in Georgia, and critical mineral recycling in Nevada. By requiring ever-increasing domestic sources of critical minerals for EV batteries and final vehicle assembly in North America, the EV tax incentive is one of our best tools for competing with China and other nations for automotive leadership.

There is still much work to do to build a broader understanding of the economic and national security benefits of transportation electrification. Ending the federal incentives would seriously hamper the American auto industry, risk hundreds of thousands of American jobs, and benefit our adversaries. We hope the new administration will preserve the EV tax credit because it is critical to American competitiveness within the global automotive sector and U.S. economic and national security.”