General Motors makes a harsh decision as EVs falter

U.S. consumers purchased 90 different EV models in the third quarter, but only nine sold more than 10,000 units.

Tesla Model Y and Model 3 were top sellers, moving more than 114,000 and 53,000 vehicles, respectively, and the Chevy Equinox sold just under 25,000.

U.S. electric vehicle sales by year + market share of new vehicle sales

• 2025 (through September): over 1 million units, 10.5% market share
• 2024: 1.3 million, 8.1% market share
• 2023: 1.2 million, 7.8% market share
• 2022: 800k 5.8%, market share
  Source: Cox Automotive

But those three models were outliers.
“The vast majority of EVs sell at a rate of far less than 2,000 units a month, or 6,000 units a quarter. In the volume-driven business of automotive manufacturing, low volume is the enemy; EV profitability remains a distant dream for nearly every automaker,” according to Cox Automotive.

U.S. electric vehicle sales have taken off in 2025 as car buyers flocked to dealers to take advantage of the $7,500 tax credit before it expired at the end of September.

But the U.S. is not just abandoning the tax incentive; under President Doland Trump, it is also loosening emissions standards and rescinding states’ rights to set their own rules.

General Motors warns about weak U.S. EV market

General Motors says OEMs like itself will lose billions of dollars from the money it invests in electric vehicles due to changes in government policy.

“Following recent U.S. Government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow,” GM said in an 8-K filing in October.

Related: Analyst picks a winner in the EV race between Ford and GM

GM is ready to eat billions in charges to rightsize its EV production.

The company’s board of directors approved third-quarter charges of $1.6 billion in GM North America for a “planned strategic realignment of our EV capacity and manufacturing footprint” that will match consumer demand.

Again, consumer demand was record-setting in 2025, but GM expects it to fall off a cliff without government support.

This week, GM initiated the next phase of its cost-cutting program: layoffs.

General Motors to lay off over 1,100 workers at Factory Zero

General Motors Factory Zero plant is an all-EV assembly plant located in the Detroit-Hamtramck, Michigan area.

The plant was originally built in 1985, but it was retrofitted to produce electric vehicles (EVs). Currently, it manufactures the GMC Hummer EV pickup and SUV, the Chevy Silverado EV, the Cadillac Escalade IQ, and the GMC Sierra EV.

Related: General Motors CEO sends hard-nosed message on EVs

Last month, GM announced that it would reduce production at the factory to one shift and lay off more than 1,000 workers. This week, a WARN notice filed in Michigan detailed exactly how many workers would lose their jobs and when.

According to a Worker Adjustment and Retraining Notification Act notice GM filed with the Michigan Department of Labour and Economic Opportunity, GM is scheduled to lay off 1,140 hourly employees from Factory Zero effective January 5, 2026.

Factory Zero currently employs about 4,000 workers, but there were also a series of layoffs at the plant earlier this year.

GM details charges from EV rightsizing

General Motors shifted a non-cash impairment charge of $1.2 billion to the third quarter as it is in the process of changing its manufacturing capacity. The company took another $400 million in contract cancellations and commercial settlements fees.

Largest Regional BEV sales 2024 (according to IEA):

• China: 6.4 million
• Europe: 2.2 million
• U.S.: 1.2 million
• Rest of the world: 1 million

However, that number could increase as GM says its reassessment of EV capacity, manufacturing footprint, and battery component manufacturing is ongoing, “and it is reasonably possible that we will recognize additional future material cash and non-cash charges.”

GM isn’t the only company that will lose billions on electric vehicles this year.

Ford says it expects to lose more than $5 billion on Model e, its electric vehicle division, this year.

For the U.S., battery electric vehicle (BEV) sales are travelling in the right lane, while China and Europe are in the passing lane, and that’s despite a strong year for U.S. EV sales.

According to J.D. Power, electric vehicles are on track to surpass a 12% market share in the U.S. for the first time, following a 2.6% year-over-year increase. 

However, the U.S. market (1.2 million) is still much smaller than that of China (6.4 million) and Europe (2.2 million).

Related: Stellantis warns this issue could destroy the European auto industry