GM and Ford Are Pulling Back From EVs

General Motors and Ford are quietly stepping back from the aggressive EV plans they were pushing just a few years ago. This is a reality check for the industry.

So, what are GM and Ford doing now

• GM has taken a multibillion-dollar writedown tied to EV investments, paused parts of its battery production, and pulled back on some EV projects that weren’t selling as expected.
• Ford delayed even canceled several EV models, especially large electric trucks and vans that turned out to be expensive to build and hard to sell profitably.

Both companies are now talking a lot more about hybrids, extended-range vehicles, and flexibility.

Why now

EV sales are not growing the way it was advertised and planned for. Second wave buyers thought a bit before buying EVs, well, prices stayed high and charging concerns are still there.

When federal EV tax credits were reduced, many buyers walked away. Supply without demand is - bad business lol.

Batteries are expensive, EV development costs are huge, and profit margins are thin, especially for large vehicles. GM and Ford have lost billions of dollars on EVs over the past few years.

At the same time, gas and hybrid vehicles are still very profitable, so it made sense to stop the bleeding.

A few years ago stricter emissions rules and generous incentives made EV a good choice. That policy environment has changed - now we have weaker regulatory pressure and fewer subsidies, also financial risk of going all-in on EVs increased.

How does this affect GM and Ford

• Big writedowns hit earnings
• Some projects and jobs get paused or reshuffled - probable laying off

in the medium term, it will actually help

• Fewer losses from unprofitable EVs
• More focus on hybrids and affordable models people actually buy.
• Stronger cash flow to invest in better, cheaper EVs later in the decade.

What does this mean for the EV market

With fewer incentives EV adoption in the U.S. will grow more slowly than many predicted a few years ago (in other words it was pushed on automakers without any good consideration for Tesla).

Outside the US, especially in China and parts of Europe, EV sales continue to rise quickly. Lower-cost vehicles and stronger policy support make a big difference.

With GM and Ford slow down, others will step in

• Tesla continues to push efficiency and scale
• Chinese are getting very good at building affordable EVs
• New battery and hybrid technologies will keep evolving

Takeaway

GM and Ford bet big on electric vehicles and ran into high costs, weak demand, and changing policies.

• Gas cars won’t disappear
• Hybrids will play a much bigger role
• EVs will keep improving and that will take a while