The impact of end of federal EV tax credits is being felt in many areas of the auto industry. It reached the factory floors at four General Motors-owned plants in three states as more than 3,400 workers were laid off due to the expected fall in EV sales tied to the end of the $7,500 credit Sept. 30.
Mary Barra, GM Chair and Chief Executive Officer, said the company took a $1.6 billion charge in Q3 to offset investments in its EV plans.
Chair and CEO Mary Barra told investors last week the company was adjusting its EV production plans in light of the move by the Trump administration and Republicans to end the credit. She said the automaker would be ramping down production in the months ahead, although EVs remain the company’s “North Star.”
The company plans to cut 1,200 jobs at its Factory ZERO plant in Detroit, as well as 550 battery production jobs at a plant in Ohio. Additionally, it will temporarily lay off about 1,550 EV-related workers at two plants in Tennessee and Ohio. The cuts will begin in January, according to multiple news reports.
Not alone
While the GM news is sobering, it is not surprising. U.S. automakers have been adjusting to the new world without the federal subsidiaries for weeks, even months since they knew it was coming. Other automakers have already ramped down production.
Ford shifted hundreds of workers from the plant at its massive Rouge complex that build the F-150 Lightning to two other plants to help produce more F-150 models powered by internal combustion engines.
Several other automakers, such as Nissan and Stellantis, simply mothballed plans to build new EVs, waiting for the market to grow naturally. That will likely be several years down the road. Sam Fiorani, vice president at research firm AutoForecast Solutions, told Reuters he expected additional EV-related job cuts to follow and “lower EV production than we’ve seen over the last few years and higher prices.”
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Angry response
Not surprisingly, the United Auto Workers union was unhappy about the moves as most of the cuts involve hourly workers. The leadership at the UAW warned about too much reliance on EVs, but they won assurances from automakers in the last contract talks that union workers would get the new jobs coming from EV production.
UAW President Shawn Fain quickly noted GM raised its full-year earnings guidance just after telling investors of intentions to scale back its EV production plans. The company also noted it took at $1.6 billion charge related to EV-production changes.
“The UAW will continue to fight for more investment in both (internal combustion engine) and EV production at GM and beyond,” Fain said.
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