GM Scales Back EV Production as US Support Wanes
General Motors (GM) will reduce production at one of its key electric vehicle (EV) facilities in Tennessee, responding to declining demand and shrinking federal support. The company will halt production of two electric Cadillac SUVs at its Spring Hill assembly plant throughout December, according to internal communications and a source familiar with the matter.
The affected models include the Cadillac Lyriq, a midsize SUV that has been one of GM’s more successful EVs, and the Vistiq, a larger electric model. Despite previous momentum in EV sales, the company is now adjusting its output to reflect the evolving market landscape.
Shift Reductions and Delays Expected Into 2025
GM plans to significantly reduce production of the Lyriq and Vistiq during the first five months of 2025. One of two work shifts at the Spring Hill plant will be temporarily laid off. Additionally, the plant is scheduled to shut down for one week each in October and November.
In a further move, the automaker is indefinitely postponing the start of a second shift at its assembly plant near Kansas City. This site is still expected to begin building the Chevy Bolt EV later this year, although staffing will remain limited.
Responding to the changes, GM said: “General Motors is making strategic production adjustments in alignment with expected slower EV industry growth and customer demand by leveraging our flexible ICE and EV manufacturing footprint.”
Impact of Policy Changes and Market Pressures
The cuts follow significant policy shifts by the Trump administration. A tax and spending law passed in July eliminated the $7,500 consumer tax credit that had supported EV sales for nearly 15 years. That credit will officially expire on 30 September.
“The $7,500 tax credit is driving demand; without that, that’ll slow,” GM CEO Mary Barra noted during an event in December 2024.
The legislation also froze penalties for failing to meet federal fuel efficiency standards. Analysts say this change encourages carmakers to prioritise internal combustion engine (ICE) vehicles over electric models.
Despite past setbacks in manufacturing, GM’s EV sales had surged in recent months. August marked the company’s best month for EV sales, with 21,000 battery-powered vehicles sold across its brands. However, executives remain cautious about the path ahead.
ICE Vehicles Remain Central to GM’s Strategy
GM executives are now leaning on their traditional ICE lineup to maintain profitability and flexibility. Duncan Aldred, head of GM’s North America operations, said this week: “As we adjust to the new EV market realities, the strength of our ICE portfolio will continue to separate our brands from the pack and give us flexibility and profitability that EV-only companies lack.”
EV sales have consistently underperformed against earlier optimistic forecasts, and most automakers continue to incur losses on their electric models. Industry experts argue that without renewed federal support, the US risks falling behind global leaders like China and Europe in EV development.
with inputs from Reuters
