GM slow-rolls its all-EV aspirations

Politico

a day ago

General Motors quietly closed the door this week on a goal to make only electric vehicles by 2035.
The automaker announced Tuesday that it would spend $4 billion on mostly gasoline-powered vehicles. While GM is not retreating from EVs, the investment means the company is 'giving up any hope of achieving that [2035] goal,' said Sam Abuelsamid, an auto analyst at Telemetry, a Detroit-area research firm.
Asked Wednesday whether the goal still exists, GM said in a statement, 'We still believe in an all-EV future.'
GM's move away from the 2035 goal is less a singular failure and more a symptom of flagging support among many actors, including government, other automakers, charging companies and car buyers, analysts said.
Much has changed since GM set the EV target, just after President Joe Biden took office and amid a surge of confidence in the auto industry about widespread EV adoption. Four years later, the Trump administration is dismantling Biden-era federal support for EVs and implementing high tariffs, upsetting automakers' production plans.
Those federal moves, combined with a cooling desire for EVs among car buyers, has moved the sunset date for the internal combustion engine to a vague someday.
GM is still ramping up EV production. Earlier this week, it trumpeted the fact that it sold 37,000 EVs in the first quarter of the year, making it the number two EV maker in the U.S. behind Tesla.
The company's 2035 goal 'was aspirational. It was more an idea than a strategy,' said Alan Baum, an independent Detroit auto analyst. 'GM's doing a better job than many of their competitors, but there's obviously a relatively low ceiling because of the lack of supportive policy.'
GM's all-EV goal back in 2021 was one of the earliest and most prominent of a wave of automaker commitments to electric vehicles. At the time, GM CEO Mary Barra encouraged others to 'follow suit and make a significant impact on our industry and on the economy as a whole.'
Others did follow — and all of those promises have been tempered by new realities.
Last year, European automakers Volvo, Porsche, Volkswagen and Mercedes all dropped earlier goals that would have seen them producing all or mostly EVs by the early 2030s.
Back in 2021, GM also put an asterisk on its 2035 target.
'We say it as an aspirational goal, because to actually make that timing, we need some external things to come together also,' spokesperson Jessica James said at the time.
Barra reiterated last month that the company still wants an 'all-EV future.'
'EVs are fundamentally better,' she said at a Wall Street Journal event late last month. 'We have work to do to continue to get battery technology to give us greater density, so we have farther range. We need to have a robust charging infrastructure.'
Automakers, including GM, have been mostly mum in public as the Trump administration and Republicans in Congress seek to kill tax incentives that make it cheaper for manufacturers to produce batteries and consumers to buy EVs.
But through the main U.S. automotive lobby, the Alliance for Automotive Innovation, automakers have vociferously opposed California's plans to require all-electric auto sales by 2035.
The Republican-controlled Congress voted to kill that California 2035 all-EV sales goal — the same one that GM first set for itself — through the Congressional Review Act. The move came after the Senate parliamentarian told lawmakers they couldn't repeal the goal through the CRA.
The bill awaits a signature by Trump, after which the California attorney general has pledged to sue.
GM's announcement that it would invest $4 billion in domestic manufacturing essentially shuffles production among factories in ways that will help the company dodge Trump's tariffs.
It is moving production of about a half-million gasoline-powered vehicles from Mexico to factories in the U.S., according to an analysis by Abuelsamid of Telemetry. Doing so will enable GM to avoid 25 percent tariffs that the Trump administration has placed on vehicles imported from Mexico.
For example, the production of several full-size SUVs and pickup trucks will transfer to GM's Orion plant, north of Detroit. The gas-powered Equinox, a strong U.S. seller, will move to the Fairfax plant in Kansas City. The gas-running Blazer will go to the company's Spring Hill plant in Tennessee.
Meanwhile, more EV production will move to GM's Factory Zero, a dedicated EV plant in metro Detroit that is running far below capacity. Electric versions of the Chevrolet Silverado and GMC Sierra pickup trucks will now get made in the plant, alongside other large EVs made in low volumes, including the Cadillac Escalade IQ and the Hummer.
Other EVs will be made elsewhere. Other electric Cadillacs, for example, will be made at the Spring Hill plant, while a rebooted version of the Chevy Bolt will be produced at the Fairfax plant, which the company described as the site for the 'next generation of affordable EVs.'
Those changes, combined with other recent moves, make it clear that GM is laying the groundwork to produce gas-powered vehicles well into the 2030s.
In May, the Detroit automaker said it would ditch plans to make electric motors at its Towanda Production plant in Buffalo, New York, and instead spend $888 million to make V-8 engines.
In 2023, GM put $579 million toward refurbishing an engine plant in Flint, Michigan. Electric vehicles don't have engines — they rely instead on batteries for propulsion.
Engine factories are large, fixed investments that are meant to operate for 15 years or more, according to Neal Ganguli, a managing director and auto-manufacturing expert at the business advisory firm AlixPartners.
Meanwhile, the manufacturing lines that make finished cars — like the ones GM unveiled this week — have shorter but still lengthy lives.
'When you put these [manufacturing lines] in, you are planning on a five- to seven-year time horizon,' Ganguli said. 'Maybe 10 years.'
Analysts said General Motors' swerve back into the gasoline lane — and away from the path to all EVs by 2035 — is not a surprise, given the market and policy realities.
'It was always a long shot at best,' said Abuelsamid.