In a move that signals a significant shift in the automotive industry’s direction, General Motors (GM) has decided to recalibrate its focus from an all-electric future to a more balanced approach that includes gasoline-powered vehicles. This strategic adjustment comes amid a cooling electric vehicle (EV) market and looming challenges, such as the expiration of federal tax credits for EV buyers.
During a recent second-quarter conference call, GM executives outlined their intention to boost production of internal combustion engine (ICE) vehicles, a decision influenced by the decline in EV sales and the upcoming end of the $7,500 federal tax credit on September 30th. Sales of EVs have seen a 6% drop compared to the same period in 2024, indicating a slowdown in what was once a rapidly expanding market.
GM’s Strategic Realignment
GM CEO Mary Barra revealed plans to increase production of popular gasoline models, including the Chevrolet Equinox and Blazer, at their Kansas and Tennessee facilities. This move is a departure from the industry’s recent emphasis on electrification. “We are well positioned to succeed in an ICE market that has now a longer runway,” Barra stated, emphasizing the company’s dual focus on improving profitability for both ICE and EV models.
The decision underscores a pragmatic response to market dynamics and consumer preferences. As EV sales struggle to keep pace with investment costs, GM’s strategy involves leveraging its traditional strengths in producing gasoline-powered vehicles. This flexibility, as highlighted by GM’s Chief Financial Officer Paul Jacobson, allows the company to adapt to fluctuating consumer demands.
The Implications for Consumers
For American consumers, this shift means that gasoline-powered SUVs will remain a staple in GM’s lineup, offering familiar and affordable options in the near term. However, the broader ambition of making EVs widely affordable and profitable remains a challenge without government incentives.
GM’s commitment to its electric goals remains steadfast, but the path forward is now more cautious and financially driven. “What we’re investing going forward is largely focused on improving our EV profitability,” Barra noted, highlighting efforts in developing cost-effective battery technologies. When questioned about the viability of affordable EVs, Barra affirmed, “We are focused on each and every vehicle getting to profitability and we’re not going to stop until they do.”
This recalibration reflects a blend of market pragmatism and strategic foresight. While GM continues to pave the way toward an electric future, the company recognizes the need to sustain profitability through its established gas-powered models, providing a buffer as it transitions and adapts to the evolving automotive landscape.
Original Story at gizmodo.com