General Motors (GM) announced on Wednesday, October 29, that it will lay off more than 1,700 employees in factories in Michigan and Ohio. This decision comes as the growth of the electric vehicle market slows down, facing the dual impact of regulatory changes and the discontinuation of subsidies.
The company confirmed that about 1,200 employees will be laid off at the Detroit electric vehicle factory. At the Ultium Cells battery plant in Ohio, 550 employees have been formally laid off, with an additional 850 on temporary layoff. At the Tennessee Ultium Cells factory, 700 employees are on temporary layoff as well.
Simultaneously, GM announced that the production lines at the battery plants in Ohio and Tennessee will temporarily shut down starting January 2026, with equipment upgrades expected to be completed by mid-2026 before resuming operations.
In its statement, General Motors expressed: “Due to the slowdown in the adoption of electric vehicles in the short term and regulatory changes, our company is readjusting the production capacity of electric vehicles.”
The statement emphasized, “Despite making these adjustments, GM remains committed to its manufacturing layout in the United States. We believe that investments in flexible operational models and perseverance will strengthen GM’s resilience and lead the industry transformation.”
This wave of layoffs follows last week’s downsizing actions, where GM announced the reduction of over 200 engineers, most of whom came from the Global Technical Center in the greater Detroit area.
Market data indicates that although electric vehicle sales in the third quarter grew more than double compared to the same period last year, the official termination of the federal consumer purchase subsidy of up to $7,500 at the end of September is expected to sharply cool market demand.
GM’s third-quarter financial report released last week also showed a $1.6 billion decrease in profit compared to expectations, primarily due to the slowdown in the electric vehicle market. Nonetheless, GM’s overall sales in the United States in the third quarter increased by 8%, with electric vehicle sales doubling to over 66,000 vehicles.
Paul Jacobson, the Chief Financial Officer of General Motors, stated in a CNBC interview last week, “We still believe in the bright future of electric vehicles and have a highly competitive product lineup, but structural adjustments must be made to reduce production costs.”
The Detroit News first reported this news. General Motors has not yet disclosed the details of the severance packages for affected employees.