General Motors: History, Innovation, and Tradition
Learn about General Motors’ rich history and notable innovations, from its founding in 1908 to its leadership in electric and autonomous vehicle technology.
- Electric vehicle sales in the U.S. have lagged behind other major auto markets in which General Motors operates, a situation GM did not foresee when it first planned its extensive EV portfolio.
- As the industry braces for a slump in EV sales, GM executives insist they made the right investment early on in a wide range of electric products.
Duncan Aldred may be the only auto executive not worried about the expected slowdown in the U.S. electric vehicle market.
As GM’s senior vice president and president of North America, Mr. Aldred is in a critical position to lead GM in its most profitable but challenging market.
Electric vehicle sales in the U.S. are lagging behind other major auto markets in which GM operates, a situation GM did not foresee when it first planned its extensive EV portfolio. “A year ago, we were on the path to a regulatory environment where we had to drive EVs,” GM CEO Mary Barra said on stage at an industry event last month.
Still, GM plans to invest a lot of money and offer a variety of EVs that it currently has. As the industry braces for a slump in EV sales, GM executives insist they made the right investment early on in a wide range of electric products.
“We believe EVs will continue to be a strong part of GM’s portfolio, and honestly, that’s one of the reasons we’ve grown our market share so much this year,” Aldred said. “That’s not something (we) expect to give up in any way.”
Year-to-date, GM estimates its overall vehicle propulsion systems market share at 17.2%, the highest in a decade. So far this year, total EV sales have more than doubled to 144,668 units.
GM’s pledge to produce only electric vehicles by 2035, made before President Donald Trump’s first administration amid a tightening regulatory environment for climate protection, has largely been reversed.
Congress passed a bill on September 30, several years before the original expiration, to end tax credits for electric vehicle buyers of up to $7,500 on eligible new car purchases and up to $4,000 on eligible used EV purchases.
Later, Ford and General Motors announced that they would extend some of their leasing incentive programs until the end of the year in preparation for the transition away from government support, but GM withdrew from the program after Sen. Bernie Moreno (R-Ohio), a former auto dealer and active on auto policy, expressed concerns about the program. Ford also withdrew.
In the decade since GM developed its strategy to develop a complete portfolio of EVs, seismic issues have repeatedly disrupted the industry and strained the company’s capital.
Ford CEO Jim Farley said at a media event on September 30 that GM’s advantage in EV sales is largely due to the variety of vehicles it offers.
“We’ve been No. 2 to Tesla for the last three years. I think GM is overtaking us now, and that’s good for them. But I think we have three models and they have like 12 models,” Farley said. “So I would expect them to start really accelerating that based on their investment.”
One step forward, one step back
Still, the smaller-than-expected EV market forced the company to make some costly decisions to align its business with realistic car sales. GM made a number of production changes this year as it canceled years and billions of dollars of work on factories to produce electric vehicles, leaving UAW employees in disarray.
GM has cut shifts and laid off hundreds of workers at its Factory Zero plant in Detroit-Hamtramck, where it invested $2.2 billion to produce GMC Hummer EV pickups and SUVs. Chevrolet Silverado EV. GMC Sierra EV and Cadillac Escalade IQ. GM confirmed on October 9 that these employees will remain furloughed through the rest of the year.
Late last month, GM changed the status of 900 furloughed workers to “indefinite” layoffs while it refurbished equipment for gas-powered Equinox production at its Fairfax Assembly Plant in Kanas City, Kansas.
UAW Local 31 President Dontay Wilson said the forced removal of these workers is “not an ideal situation.”
“I understand business is business, but it would be great if we could keep these people safe for the foreseeable future,” he told the Detroit Free Press, part of the USA TODAY Network. “GM Fairfax’s local management team has done a decent job, but from a top-down approach, it’s been surprising at times. On our part, we’ve been doing everything we can to give it our all.”
GM announced in April that its Toledo (Ohio) propulsion systems plant, which makes transmissions for Silverado and Sierra pickup trucks, would increase production to reduce production of electric drive units.
But as first reported last month by a local television station, local union leaders confirmed to the Detroit Free Press that GM told employees it would also remove equipment to produce electric drive units on-site — equipment that GM said would cost GM $760 million in 2022.
Toledo Propulsion Systems is GM’s first powertrain or propulsion plant in the United States that has been modified for EV production.
About 1,520 GM employees work at the plant, according to the company’s website. UAW Local 14 President Tony Totti said the move was still a blow, although no jobs were lost at the plant, only reallocated.
“Just a few months ago, we went for a drive in an EV and the guys were excited,” Totti said in an Oct. 2 interview. “This is heartbreaking. Our members were excited to build these things.”
These electric drivetrains are designed for GM’s Orion assembly plant, which has received a $480 million grant from the state of Michigan to expand electric vehicle production. On July 15, the company finalized plans to produce Cadillac Escalade, Chevrolet Silverado and GMC Sierra light pickup trucks there.
Buyers will run out of extra funds
Joseph Yun, consumer insights analyst at Edmunds, said GM’s strategy to offer electrification options on its most popular models, such as the Chevrolet Blazer, Equinox and Silverado, is a direct response to what consumers are looking for in the company’s new products.
“Any kind of EV they want, they can get it at GM,” he said. “Having this much choice in our lineup makes it easy to electrify our customers.”
No matter how desirable the product, high price tags and lack of charging infrastructure present challenges for dealers when marketing vehicles to customers.
The EV tax credit has been in place since 2008, so James Fackler, executive vice president of the Michigan Automobile Dealers Association, said it’s understandable why GM would want to continue the support consumers expect in showrooms.
“I understand the concern that this sales is going to dry up. People are expecting this money, but if they don’t have it, will they continue to come?” he said. “There are a lot of dealers that support EV models. Like all salespeople, they want to give the customer what they want, and they check all the boxes. Cars, even used, are very expensive purchases.”
What will the future hold?
When GM committed to offering a portfolio of all-electric vehicles, it envisioned a market that could support their sales. Since that hasn’t happened, the company is trying to protect sales of vehicles it knows will be profitable: internal combustion vehicles.
That’s why GM has supported the Trump administration’s efforts to defeat clean air regulations. One example is GM’s praise of the Trump administration when it signed a Congressional resolution in June revoking exemptions from California and other states’ ban on the sale of gasoline-powered cars.
GM and other automakers have long argued that they shouldn’t be allowed to do so because it would effectively allow California and other states to decide what kinds of cars and trucks must be made for the nation.
The White House shared what General Motors said after the exemption was lifted, saying, “We appreciate the action President Trump has taken to sign[the resolution]and align emissions standards with today’s market realities. We have long advocated for a single national standard that would help us remain competitive, continue to invest in American innovation, and provide customers with choice across a broad lineup of gasoline and electric vehicles.”
Charlie Chesbrough, senior economist and senior director of industry insights at Cox Automotive, also said the industry welcomes President Trump’s intervention in the clean air industry.
“When it comes to the auto market, it may be a blessing in disguise for automakers that there will be less stick around in terms of EV mandates, which will free them up in the long run to produce cars that people want and can buy,” Chesbrough said.
“Everyone is in shock right now and trying to figure out what the best strategy is going forward,” he said. “The bigger danger for the Detroit Three is that they’re no longer a global manufacturer. They’re being pushed back to North America, and China…seems to be starting to move people to them (battery electric vehicles) quickly. Can we make competitive electric products, or is this going to be a concession to the Chinese market?”
No discount required
Aldred’s goal to maintain EV sales momentum without excessive discounting is ambitious, as GM faces rising tariff costs and the stripping of government tax incentives.
Despite the challenges, Aldred said he plans to stick with GM’s strategy that has allowed the company to gain market share, even as competition accelerates incentives and discounts. Earlier this year, several automakers adjusted their pricing strategies ahead of President Trump’s first round of tariffs on foreign vehicles and parts. GM is the only Detroit-based automaker that has not run any ads about its U.S. efforts or cost-cutting efforts.
GM also unveiled its latest EV, the new Chevrolet Bolt, on October 9, and said it plans to begin shipping to dealers in January. But the Detroit automaker said the car would only be sold for “limited mileage” and wouldn’t tell reporters what that meant.
Paul Watty, director of industry analysis at AutoPacific, said Bolt’s return corrects one of Mary Barra’s rare missteps. The move comes at a time when affordability remains the biggest barrier to electric vehicle sales, and the company is retiring the most available long-range EVs.
“There’s still a chicken-and-egg dilemma. For affordable EVs to survive, we need volume, but without affordable EVs, we won’t have volume,” Watty said. “GM, perhaps more than any other automaker, is uniquely positioned to meet this tension, even if it means taking a loss, with a strong ICE portfolio that can flexibly support EV accessibility.” ― Until a long-term EV strategy takes shape. ”
Aldred said GM will continue to offer incentives to stay “competitive,” but the company’s plan is to more or less let the cars speak for themselves.
Is that one way? By keeping inventory levels of desirable products low and increasing dealer profitability, automakers no longer need high incentives to sell cars.
“We’re not going to change that formula. Looking ahead to next year, we started looking at the industry…what’s going to happen, what are the other brands going to do, what’s going to be the incentive landscape?” Aldred said. “Ultimately, we said, ‘Well, let’s take a look at ourselves,’ because the reality is that what we’re adopting is somewhat irrelevant to what other people do. We have a good portfolio of EVs (as well as internal combustion engine vehicles), and we believe we can sell a lot of these vehicles regardless of what happens in the larger market.”
Jackie Charniga covers General Motors for the Free Press. Contact me at jcharniga@freepress.com.
