GM scales back EV production ahead of tax credits expiring
General Motors is scaling back its electric vehicle production ahead of the Sept. 30 expiration of the federal $7,500 consumer tax credit, according to multiple media sources.
According to Bloomberg, GM will start production on its Chevrolet Bolt EV in December with one shift at its plant in Kansas. Two shifts were originally planned for Bolt production.
Production will also be reduced at GM’s Spring Hill, Tennessee assembly plant to one shift from January through May, Bloomberg reports. The plant builds the Cadillac Lyriq and Vistiq EVs. It also builds the ICE Cadillac SUVs.
“General Motors is making strategic production adjustments in alignment with expected slower EV industry growth and customer demand,” the company said in a statement to Bloomberg.
GM reported Tuesday that it set an all-time monthly record for EV sales in August, ahead of the expiration of the EV tax credits.
“August was our best month ever for EV sales — and we expect that buying surge to pay long-term dividends, given our industry-leading manufacturer loyalty, and EV customers’ overwhelming commitment to the technology,” a statement posted to the company’s website from Duncan Aldred, GM senior vice president and North America president, says. “I’m grateful to our team and our dealers for helping us outperform nearly every EV competitor.”
He notes in the statement that strong demand will likely remain in September, but the market is expected to shrink after the credit expiration.
Other OEMs reported strong EV sales as the tax credits near expiration. For example, Ford reported August U.S. sales increased by 3.9% to 190,206 vehicles sold in the month compared with the year-ago August, according to Yahoo Finance.
“There’s no doubt we’ll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize,” Aldred wrote. “We will almost certainly see a smaller EV market for a while, and we won’t overproduce. Still, we believe GM can continue to grow EV market share.”
He points to some positives with EVs, with the expansion of public fast-charging bays across the country. He writes that customers will have access to more than 65,000 bays by the end of the year. GM expects that to grow by 80,000 by the end of next year and 100,000 by the end of 2027.
Mercedes-Benz is also pausing U.S. production of its EV models ahead of the rebate expiration, including the EQE and EQS models.
The company initiated a “fire sale” of its electric models ahead of the expiration of the tax credit. Other companies, such as Tesla and Ford, have also offered deals in recent months.
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