But even in this buying frenzy, some cracks appeared.
U.S. consumers purchased 90 different EV models in the third quarter, but only nine sold more than 10,000 units.
The Tesla Model Y and Model 3 were top sellers, selling more than 114,000 and 53,000 vehicles, respectively, and the Chevy Equinox sold just under 25,000.
But these three models were outliers.
“The vast majority of EVs sell at a rate of much less than 2,000 units per month or 6,000 units per quarter. In the volume-oriented automotive manufacturing business, low volume is the enemy; EV profitability remains a distant dream for nearly every automaker.” According to Cox Automotive.
With the writing on the wall, original equipment manufacturers like General Motors are rethinking their EV strategies.
The sprawling GM plant in Lordstown, Ohio is undergoing some big changes.Grillot/Bloomberg via Getty Images” loading=”eager” height=”640″ width=”960″ class=”yf-lglytj loader”/>
The sprawling GM plant in Lordstown, Ohio is undergoing some big changes.Grillot/Bloomberg via Getty Images
General Motors says it and other OEMs stand to lose billions of dollars in money invested in electric vehicles due to changes in government policy.
“Following recent U.S. Government policy changes, including ending certain consumer tax incentives for EV purchases and reducing the stringency of emissions regulations, we expect the rate of adoption of EVs to slow,” GM said in an 8-K filing in October.
GM It is prepared to spend billions of dollars to right-size EV production.
of the company Board of Directors GM approved $1.6 billion in third-quarter charges in North America for a “planned strategic realignment of our EV capacity and manufacturing footprint” to meet consumer demand.
As a result, General Motors announced that it will lay off more than 1,000 workers at Factory Zero, its all-EV assembly plant located in the Detroit-Hamtramck, Michigan area.
GM also shared that it will reduce production at the factory to a single shift.
But right-sizing EV production didn’t stop there. On Monday, January 5, workers at GM’s Lordstown, Ohio, plant, where some EV fuel cells are produced, received similar bad news.
General Motors no longer operates the Lordstown, Ohio assembly plant, which it sold in 2019. However, the company continues its operations at the factory site, including Ultium Cells, which produces batteries for its electric vehicles.
General Motors sent a letter in October announcing “mass layoffs of GM’s hourly-represented employees” scheduled to begin Jan. 5 at the Lordstown plant.
Related: Ford and General Motors receive troubling news about car sales
More than 1,300 employees will be affected by temporary cuts layoffs For 850 employees. But hundreds of jobs at the Ultium Cells battery plant in Lordstown are being eliminated, possibly permanently.
Most of the employees affected by the layoffs in Lordstown are battery assembly operators, according to the company. General Motors said it would use the production slowdown and lighter workforce to make improvements at the facility.
“Over the past several years, our portfolio and capacity plans have been shaped by increasing regulatory stringencies around fuel economy and emissions. We have aggressively expanded our electric vehicle capacity to meet these requirements,” said CEO Mary Barra. he said in the letter.
“However, with the evolving regulatory framework and the expiration of federal consumer incentives, it is now clear that EV adoption in the near term will be lower than planned. That is why we are re-evaluating our EV capacity and manufacturing footprint… By moving quickly and decisively to address excess capacity, we expect to reduce EV losses in 2026 and beyond,” Barra said.
According to documents filed with the Ohio Department of Job and Family Services, local sources say NBC news television affiliate WFMJ 21In addition to 142 quality operators and 102 material operators, 1,090 battery assembly operators are also being laid off.
General Motors recorded a non-cash impairment loss of $1.2 billion in the third quarter as it was in the process of adjusting production capacity. The company received another $400 million in contract cancellations and business settlement fees.
However, that number could increase as GM said its reassessments of electric vehicle capacity, manufacturing footprint and battery component production are ongoing and “it is reasonably possible that we will recognize additional tangible and non-cash charges in the future.”
GM isn’t the only company that will lose billions of dollars on electric vehicles this year.
Ford announced that it expects to lose more than $5 billion this year on its electric vehicle division, Model e.
Battery electric vehicle for USA (BEV) sales are moving in the right laneWhile China and Europe are in the transition lane, and this despite a strong year for U.S. electric vehicle sales.
Electric vehicles are on track to surpass 12% market share in the U.S. for the first time following a 2.6% annual increase in sales, according to J.D. Power.
But the US market (1.2 million) is still much smaller than China (6.4 million) and Europe (2.2 million).
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