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- Automakers are bracing for a bumpy road after Trump slashed EV incentives.
- GM’s CFO said the regulations had encouraged some rivals to sell EVs for “whatever they could get.”
- GM is rolling back its ambitious EV plans amid warnings that demand is about to plummet.
GM is betting that the EV winter will lead to a “more stable environment.”
Speaking on a call with analysts after General Motors reported earnings that beat Wall Street’s expectations, CFO Paul Jacobson said clean-air regulations were encouraging some of the Detroit automaker’s rivals to unload their EVs at bargain-basement prices.
“We had a number of competitors out there that really were selling EVs for whatever they could get for them, because they really wanted to get the credits on the environmental side. So we do think it will be a more stable environment,” Jacobson said.
Under a regulatory scheme dismantled by the Trump administration earlier this year, automakers faced fines if they failed to generate enough regulatory credits from selling EVs or buy them from electric-only companies like Tesla.
Jacobson said that electric vehicle demand will likely be “pretty choppy” for the near future, after the $7,500 federal tax credit for new US-made EVs expired in September.
GM once had ambitious plans to sell only EVs by 2035, but the company took a $1.6 billion charge this quarter following its electric vehicle strategy overhaul.
Like other automakers, the Chevrolet-owner has scaled back its EV plans and invested in combustion-engine vehicles after the Trump administration rolled back federal support for electric cars.
GM CEO Mary Barra told analysts that EVs remained the company’s “North Star,” but added that GM would aim to cater to reduced customer demand for electric cars while improving the profitability of its EV operation.
Wall Street seems to be on board with GM’s new approach. Shares rose more than 14% on Tuesday after the company reported higher-than-expected quarterly revenues and raised its guidance for the year.
GM also downgraded the expected hit from the Trump administration’s tariffs. It had previously estimated a hit of $4 to 5 billion, but now expects the impact to be between $3.5 and 4.5 billion.
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