As the automotive industry shifts gears towards electric vehicles (EVs), General Motors has encountered a significant bump in the road. The company has paused operations at its Factory Zero in Detroit for the second time in under three months, affecting 1,300 workers. Production is expected to resume by mid-April.
Factory Zero Faces Another Halt
Kevin Kelly, a spokesperson for GM, announced the temporary shutdown, citing the need to align EV production with current market demand. Employees are anticipated to return on April 13.
Factory Zero is responsible for manufacturing GM’s high-end EVs, including the GMC Hummer EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac Escalade IQ. These models are among GM’s priciest and least sought after in the EV lineup. Workers affected by the shutdown might qualify for supplementary pay and benefits as per the GM-UAW national contract.
This is not an isolated incident. The plant has faced ongoing disruptions since mid-2025. GM reduced its workforce by 1,200 in October 2025 as part of a larger downsizing of 3,300 positions across its EV operations. The plant experienced further downtimes from late October through November 2025, and again towards the year’s end.
Challenges of a Major Investment
GM invested $2.2 billion in transforming the old Detroit-Hamtramck Assembly plant into Factory Zero, a facility dedicated to EVs intended to spearhead the company’s transition to an all-electric future. CEO Mary Barra previously highlighted Factory Zero as evidence of GM’s EV ambitions.
However, the endeavor has faced difficulties. In January, GM projected a drop in EV production for 2026 and recorded $7.6 billion in charges related to EVs in 2025, including a $6 billion writedown from canceling production plans and battery supply contracts.
While GM sold close to 170,000 EVs in the U.S. in 2025, a 48% increase from the previous year, sales plummeted in Q4 2025 after the cessation of the $7,500 federal EV tax credit on September 30, leading to a 43% sales drop in the fourth quarter.
The product lineup at Factory Zero poses an additional issue. The Hummer EV and Escalade IQ are luxury items with starting prices above $80,000 and $130,000, respectively, which do not appeal to the mass market. Meanwhile, the more affordable Chevy Equinox EV, priced around $35,000, is manufactured at a different location.
Policy Changes Impacting Production
The rollback of consumer EV incentives and emissions standards by the Trump administration has posed challenges for automakers. The removal of the tax credit eliminated a key purchase incentive, while relaxed emissions standards reduced the regulatory pressure to increase EV sales.
As a result, GM has shifted focus away from EVs. The company converted a planned EV facility in Michigan to produce traditional vehicles and halted battery production at two Ultium joint-venture plants.
Despite these challenges, GM saw significant growth in EV sales in 2025, indicating consumer interest. The company ended its own $7,500 EV discount program in October, removing another purchase incentive.
Original Story at electrek.co