TLDRs;
- GM to cut Cadillac Lyriq, Vistiq, and Chevy Bolt EV production as U.S. tax credit ends.
- Tennessee plant pauses, Kansas City expansion delayed, with worker layoffs planned in early 2026.
- Analysts warn EV sales could plunge up to 50% after subsidy loss, echoing Georgia’s 2015 collapse.
- Automakers brace for shrinking EV demand despite record sales ahead of tax credit deadline.
General Motors (GM) is pulling back on its ambitious electric vehicle (EV) production targets as the U.S. prepares to phase out the $7,500 consumer tax credit for new EV purchases at the end of September.
The automaker announced that it will scale down production of its flagship Cadillac Lyriq, the upcoming Cadillac Vistiq, and the popular Chevy Bolt EV, citing expectations of weaker demand once the federal incentive expires.
Tennessee Plant Faces Production Pauses
According to GM, assembly of the Cadillac Lyriq and Vistiq at its Spring Hill, Tennessee, facility will pause in December, with additional one-week shutdowns planned in October and November.
Looking ahead, the company will also reduce output in the first five months of 2026 by laying off one shift of workers at the same plant.
While GM has emphasized that August was its strongest month yet for EV sales, executives are already bracing for a slowdown. The company’s cautious moves reflect a broader concern across the auto industry that the removal of incentives will create a steep drop in consumer demand.
Chevy Bolt Expansion Put on Hold
GM’s plans to add a second production shift at a Kansas City-area facility, intended to ramp up manufacturing of the Chevy Bolt EV, have now been postponed indefinitely.
This marks a reversal from earlier commitments to expand output in line with strong sales momentum.
The decision signals GM’s reluctance to risk overproduction. Automakers are increasingly wary of flooding the market with vehicles that may not find buyers once federal subsidies disappear.
Lessons From Georgia’s EV Incentive Cut
Industry analysts warn that the federal policy change could trigger a repeat of Georgia’s 2015 experience, when the state abruptly eliminated its $5,000 EV tax credit. At the time, EV registrations collapsed by 89% within two months, plummeting from 1,338 in June to just 148 in August.
Georgia had previously been a hotbed of EV adoption, with ownership soaring from 1,743 vehicles in 2012 to 15,729 in 2014, an 802% increase. The collapse highlighted how dependent the market was on incentives.
Federal data today suggests a similar trend nationwide, with surveys showing that nearly half of Ford EV buyers said they would not have made the purchase without the federal tax credit. Analysts are now projecting EV sales could fall by as much as 50% across major automakers once the current subsidy ends.
Automakers Brace for Demand Collapse
The contrast between GM’s booming August sales and its planned production cutbacks underscores the temporary boost created by the looming incentive deadline.
In July, U.S. EV sales surged 26.4% month-over-month to 130,082 units as consumers rushed to take advantage of the credit before it expires.
GM’s forward-looking strategy suggests it is preparing for a sharp contraction in the EV market once the policy shift takes effect. By pausing production lines and reducing workforce shifts, the company hopes to align supply with post-credit demand rather than risk a glut of unsold vehicles.
