General Motors (GM) announced that it has decreased its earnings projections and scrapped a key short-term electric vehicle (EV) production target as the United Auto Workers (UAW) strike rages on, The Associated Press reported Tuesday.
GM said that it would be backing off its goal to produce 400,000 EVs in North America by the middle of next year, according to the AP. The company is also lowering its expected pretax earnings for the year by $800 million, and by another $200 million every week after that, Paul Jacobson, GM’s CFO, reportedly said on Tuesday.
Despite abandoning its target for mid-2024, the company is still standing by its goal to be able to produce 1 million EVs in North America by the end of 2025, Jacobson said, according to the AP. The company also plans to slow down its EV production schedule to compensate for the slower pace of near-term growth in demand for the products, which tend to cost thousands of dollars more than internal combustion engine vehicles, according to Kelley Blue Book. (RELATED: EVs Are Costing Auto Manufacturers Billions While Union Strikes Take Their Toll)
REPORTER: “Is the automakers strike in the contract impasse partly a result of the President’s forced transition to electric vehicles?”
JEAN-PIERRE: “Uhh, no.” pic.twitter.com/2CNf6N0BEE
— Daily Caller (@DailyCaller) September 15, 2023
It is unclear how GM plans to reach its 2025 target given its decisions to back off of its mid-2024 goal and slow down its EV production in the very near-term. EVs lay at the heart of the UAW strike that is sapping GM’s earnings, as union leadership and many rank-and-file members are concerned that UAW jobs may be eliminated in the longer-term as government policies force manufacturers to vastly increase production of the less-labor intensive EVs.
UAW expanded its strike against GM shortly after the earnings conference, targeting GM’s plant in Arlington, Texas, according to the AP. That specific facility is one of the company’s most profitable plants.
The Biden administration has spent billions of dollars and regulated the industry to facilitate its EV push. President Joe Biden is aiming for 50% of all new vehicle sales to be EVs by 2030. The administration has committed $12 billion to allow manufacturers to retrofit their plants for EV production and $7.5 billion from the Bipartisan Infrastructure Law to develop a national charging network, while the Inflation Reduction Act (IRA) contains $12.5 billion worth of tax credits to entice consumers into switching to an EV, according to UtilityDive.
GM and the UAW did not respond immediately to requests for comment.
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