Why General Motors Is Slowing Its Electric Vehicle Push

Not long ago, Chief Executive Mary Barra announced that General Motors was about a decade away from abandoning gasoline-powered cars, charting a new mission intended to protect the planet for generations to come.

“We have an opportunity and frankly a responsibility to create a better future,” Barra said in a 2022 speech. She vowed to introduce 30 electric-vehicle models worldwide within a few years and, shortly after, to convert more than half of GM’s North American factories to EV production.

Her bold effort to seize new markets and rescue the planet has since faltered. GM has shifted from being one of the sector’s most vocal EV proponents to a top adversary of government emissions regulations and fuel-economy mandates that for decades helped spur consumer demand for cleaner, more fuel-efficient cars.

Many automakers, confronting cooling EV sales and a Trump administration antagonistic to green-energy programs, have pushed for eased rules. None has reversed course as fast or as dramatically as GM.

“GM sold us out. Mary Barra sold us out,” California Gov. Gavin Newsom said at a recent briefing. He was still irate over GM’s successful drive to help strip the state of its power to set cleaner air standards than those of the rest of the country.

This year the Detroit-based automaker has spent more lobbying the federal government than any company besides Meta, devoting much of the money to challenging clean-air and fuel-economy regulations. GM’s $11.5 million in disclosed spending through June is nearly twice Toyota’s total and about six times Ford’s.

One GM lobbyist called the office of Sen. Ted Cruz (R., Texas) earlier this year to back his push to weaken five-decade-old federal fuel-economy rules that over time substantially cut fuel use and emissions, and helped give rise to cars such as Toyota’s Prius.

Congress added Cruz’s amendment to the Big Beautiful Bill, removing penalties for automakers, including GM, whose fleets fall short of Corporate Average Fuel Economy targets.

This spring, thousands of GM white-collar staff received emails that began, “We need your help!” The messages urged them to phone lawmakers to oppose tougher auto-emission standards in California and 17 other states, plus Washington, D.C. The stringent caps would have effectively prevented the sale of new gas-powered cars by 2035.

While GM says it remains committed to EVs, Barra has stopped reiterating her 2035 goal to produce only EVs, saying instead that the shift will take decades. In a July letter to shareholders, she assured them GM is well placed to thrive in a market for internal-combustion vehicles “that now has a longer runway.” Barra is promoting GM’s multibillion-dollar bets on V-8 engines, gasoline pickups and SUVs, while canceling plans for plants to build EVs and the batteries that power them.

The pivot is a pragmatic response to the weak performance of the once-hot EV market, Barra says. U.S. sales industrywide are expected to drop after Sept. 30, when a $7,500 federal tax credit for EV purchasers expires.

President Trump, center, speaking in 2017 to General Motors CEO Mary Barra in Ypsilanti Township, Mich.

“What we’re committed to is the customer,” she said about the change during a Wall Street Journal event in May. “The customer was telling us they weren’t ready.”

Electric vehicles made up roughly 4% of the 2.7 million cars GM sold last year. So far this year, EVs comprised about 6% of GM’s sales, boosted by new models and the impending end of federal tax incentives.

The automaker’s lobbying is meant to adjust what it sees as an unrealistic regulatory timetable, given that “the consumer wasn’t ready to go as fast as the rest of us were,” said GM director Jonathan McNeill, a former senior executive at Tesla and Lyft. He said Barra remains committed to EVs.

GM has broadened its U.S. EV lineup from 2016 through this year to about a dozen models—more than any rival—and sales have more than doubled this year. It also lobbied for measures that support EV manufacturing in the U.S., the company said, including federal buyer tax credits, expanded charging infrastructure and federal backing for projects to mine and process minerals used in EV batteries.

Barra, GM’s chief since 2014, said she learned from the company’s rocky relationship with President Trump during his first term. This year, GM backed Trump’s tariffs—despite higher costs for imported parts and vehicles—and has lauded administration efforts to expand U.S. manufacturing.

Trump, a critic of global efforts to confront climate change, said during his U.N. address last week that it was “the greatest con job ever perpetrated on the world.”

The Detroit launch of the Chevy Volt in 2009.

Starting line

GM’s first electric car, the EV1 sedan, was sold for three years before GM discontinued it in 1999 because of steep production costs and lukewarm demand. A decade later, seeking an answer to Toyota’s successful Prius—and mindful of an upstart named Tesla—GM introduced the Chevrolet Volt plug-in hybrid. It proved another financial loser and was discontinued in 2019.

In November 2020, Barra vowed to introduce more than 20 new EVs in North America by 2025. To achieve that, GM planned to spend $27 billion. Engineers would use a unified battery architecture, developed in partnership with South Korea’s LG and intended to lower vehicle prices. Plans included electric variants of its pickups and SUVs.

Not everyone agreed with the pace and scale of Barra’s plan, people familiar with the matter said. Some GM executives, particularly in sales, worried the company was moving too far, too fast toward EVs. Barra, annoyed at GM being labeled an industry laggard, told them to align with the strategy.

A demonstration outside a GM training center in Burbank, Calif., to protest company plans to crush around 70 EV1 electric vehicles in 2005.

Barra set sales targets for EV models, saying the company and its engineers would perform better if pressured, the people familiar said. We don’t want to be disrupted, we need to disrupt ourselves, Barra has said inside and outside the company.

In January 2021, Barra highlighted the company’s EV efforts at CES, the tech world’s premier annual show. She pledged billions, aided by government support, to convert factories that made gas engines and vehicles into plants producing EVs and batteries.

New models ranged from an EV version of GM’s compact Equinox SUV to the enormous Hummer EV with a six-figure price tag.

The company’s stock jumped to its highest level in a decade. By the end of 2021, it was up nearly 50% to record highs.

In reverse

For a time, employees at a GM plant on the Detroit-Hamtramck border, nicknamed D-Ham, seemed like winners. The facility produced gas-powered Cadillacs, Chevrolets and, for a spell, the electric Volt, before nearly shutting down in 2020.

GM selected D-Ham as the manufacturing centerpiece of its new EV initiative. The 40-year-old plant was refurbished and renamed Factory Zero, a nod to GM’s ambitious goal of zero crashes and zero emissions.

In late 2021, the first Hummer EV pickup rolled off the line. All-electric versions of the Chevrolet Silverado pickup, Cadillac Escalade SUV and others followed. The plant’s union local hosted an event allowing members to test drive the $100,000 trucks.

Three years on, signs that the industry’s EV expectations were overstated were hard to ignore. Dealers were left with unsold EVs, used EV prices collapsed. Even Tesla reported falling sales.

This January, Trump pledged in his inaugural speech to end mandates requiring new cars sold in the U.S. to be emission-free. Three months later, GM cut 200 of Factory Zero’s 4,000 jobs, citing slower sales.

“We’re always in the crosshairs,” said James Cotton, president of the UAW local representing workers there. “We’re just trying to build quality vehicles and survive.”

In the spring, GM’s lobbyists and executives were negotiating with California officials over the state’s emissions rule that in a decade would essentially allow only EVs to be sold as new cars.

The U.S. auto industry opposed the standards. Negotiators with the California Air Resources Board offered concessions to help automakers meet the mandate, people familiar with the discussions said. The state believed the proposal would satisfy GM.

The company instead held out for looser rules. The day before the state regulator and GM officials were to meet in March, GM walked away. The automaker was seeking a far larger concession: removing California’s authority to set such rules.

The company allied with California auto dealers who also opposed the new standards. Robb Hernandez, a Los Angeles-area Chevy dealer who joined that effort, said GM is striking a difficult but necessary balance.

Even among his EV-leaning customers, Hernandez said, it was clear people weren’t adopting the vehicles quickly enough to keep up with state rules. About a third of GM’s U.S. models are electric. “I’m happy where we are,” Hernandez said. “We have a foot in both camps.”

After the Senate voted in May to strip California of its authority to set its own air-emissions standards, Newsom in a news briefing called GM shameful for “working behind our backs, working behind your back, and our kids’ backs.”

GM, in a statement, said it spent 18 months negotiating with California regulators, talks that failed to produce emissions rules that bridged the gap between state mandates and the EV market.

Unplugged

GM’s clashed with rival Ford over another piece of EV legislation, sparking a near-revolt inside the industry trade group this spring, according to people familiar with the episode.

Ford was poised to receive federal aid to help build a $3 billion EV battery plant in Marshall, Mich. The facility, like many U.S. battery operations, depends on technology from a Chinese supplier to produce low-cost lithium-ion batteries.

Lawmakers this year debated denying the funds because of the Chinese connections. In response, Ford wanted the trade group, the Alliance of Automotive Innovation, to urge Congress to support the project. Given that several automakers rely on Chinese partners to develop EVs, few expected a dispute.

Top lobbyists from companies in the trade group met in March in what turned into a heated debate over formally endorsing Ford. GM and its battery partner, LG, argued the federal aid should be withheld. Government resources should be aimed at strengthening fully domestic battery production, GM said, even threatening to leave the group.

Roughly a dozen attendees in a committee meeting held an informal vote. GM and LG were the only opponents. Measures at the committee level required unanimous approval to advance, per Alliance rules, so the idea was killed. Later, at a full meeting, the trade group voted to amend its bylaws to stop a single member from sinking a proposal backed by a majority. GM’s no vote was overturned.

An Alliance spokesman said it wasn’t uncommon for members to disagree. “Companies have different business models, strategies and product portfolios,” he said.

EVs are still coming off the line at Factory Zero. Yet a major revamp to convert a GM plant in Orion, Mich., to make EV trucks will instead produce gas-powered ones. A New York engine plant slated to become a battery facility will now produce V8 engines.

Cotton, the union official at Factory Zero, said that as far as he knows, GM’s plan to go all EV by 2035 remains intact. “I just have to put my faith in what Mary is doing,” he said.

Barra said in May that weak consumer demand and an insufficient national charging network have stalled the EV industry, but she believes the cleaner vehicles will eventually supplant gas-powered cars.

“I do believe we’ll get there,” Barra said, “because I think the vehicles are better.”