TLDR
- GM is laying off approximately 5,500 workers across three facilities due to slower EV adoption and regulatory changes
- The Factory Zero plant near Detroit will move to a single shift, with only 1,200 of 3,400 furloughed workers returning in January
- The layoffs follow President Trump’s elimination of the $7,500 EV purchase tax credit in July 2025
- GM recently took $1.6 billion in write-offs reflecting lower expected demand and profitability for its EV business
- Despite EV troubles, GM stock is up 31% year-to-date, with traditional gas-powered vehicles still generating the bulk of profits
General Motors announced Wednesday it will lay off approximately 5,500 workers across three facilities. The cuts come as the automaker adjusts its electric vehicle production plans.
The layoffs affect workers at GM’s Factory Zero plant in Detroit. The facility builds the electric Chevrolet Silverado, GMC Sierra, and Hummer EVs.
About 3,400 workers were already furloughed at Factory Zero over the summer. GM will bring back roughly 1,200 of these employees in January when the plant resumes operations.
The catch? The plant will run on just a single shift instead of multiple shifts.
The remaining 2,200 Factory Zero workers face indefinite furloughs. That’s a tough pill to swallow for anyone counting on returning to work.
Battery Plant Workers Also Affected
The cuts extend beyond Detroit. General Motors laid off 1,400 workers at its Ultium battery plant in Warren, Ohio.
Another 710 employees lost their jobs at the Spring Hill, Tennessee facility. Company spokesman Kevin Kelly said about 850 Ohio workers might return in May.
However, 550 of the Ohio layoffs are considered indefinite. The Tennessee layoffs are classified as temporary.
GM explained the moves in a statement. The company cited “slower near-term EV adoption and an evolving regulatory environment” as reasons for realigning EV capacity.
Tax Credit Elimination Impacts Sales
The regulatory environment changed drastically in July 2025. President Donald Trump eliminated the $7,500 EV purchase tax credit through a spending bill passed on July 4.
Before that happened, EV sales hit a record in September. Buyers rushed to purchase electric vehicles before losing the tax benefit.
EVs accounted for 12% of all new U.S. car sales that month. Now automakers are bracing for weaker sales without the incentive.
GM recently took $1.6 billion in write-offs. These write-offs reflect expectations of lower demand and profitability for its EV business.
The company stressed it remains committed to its U.S. manufacturing footprint. GM believes its investments in flexible operations will help it adapt to changes.
Affected employees might be eligible for pay and benefits. Eligibility depends on terms in the national labor agreement.
GM shares were down 0.5% in Wednesday trading. The S&P 500 and Dow Jones Industrial Average were up 0.2% and 0.6%, respectively.
The EV troubles haven’t hurt GM shares overall. Coming into Wednesday, GM stock was up 31% year to date.
The company posted a whopping 15% rise after reporting better-than-expected third-quarter profits on October 21. Tariff-induced cost increases haven’t been as bad as feared.
New car demand has held up better than investors expected at the start of 2025. Gasoline-powered cars still generate the bulk of GM’s profits.
Traditional automakers don’t make good money selling EVs yet. That’s why investors haven’t punished GM stock despite the EV setbacks.
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