Why Mary Barra Is Slowing Down GM's EV Plans

The Shift in General Motors’ Strategy

General Motors (GM) has undergone a significant transformation in its approach to electric vehicles (EVs). Once a vocal advocate for transitioning away from gas-powered cars, the automaker now finds itself at odds with its earlier commitments. This shift is driven by a combination of market realities, regulatory challenges, and internal strategic decisions.

In 2022, GM’s CEO, Mary Barra, announced that the company was on a path to eliminate gas-powered vehicles within a decade. She emphasized the importance of creating a better future for the planet and pledged to launch 30 electric-vehicle models globally. However, this ambitious vision has since faced setbacks. GM has moved from being a leading champion of EVs to a key opponent of government emissions rules and fuel-economy standards that have historically supported cleaner, more efficient vehicles.

Lobbying Efforts and Regulatory Pushback

One of the most notable shifts has been GM’s increased lobbying efforts. This year, the automaker has spent more on federal lobbying than any company except Meta. Much of this spending has gone toward opposing clean-air and fuel-economy regulations. For instance, GM has actively worked to weaken 50-year-old federal fuel-economy rules that have helped reduce emissions and promote innovation in the automotive industry.

This push has led to significant political consequences. California Governor Gavin Newsom criticized GM for its role in stripping the state of its authority to set stricter clean-air regulations. GM’s actions have drawn strong backlash, particularly from environmental advocates who feel betrayed by the company’s shift in stance.

Internal Challenges and Strategic Adjustments

Internally, GM has faced pressure from both employees and executives. In a recent email, thousands of white-collar employees were urged to call lawmakers to oppose stricter auto-mission standards in California and other states. These measures would effectively ban new gas-powered vehicle sales by 2035. Despite these efforts, Barra has downplayed her previous 2035 target, stating that the transition to EVs will take decades.

The company has also shifted focus back to traditional gasoline-powered vehicles. Barra has highlighted investments in V-8 engines, pickups, and SUVs, while scaling back plans for EV factories and battery production. This change reflects the current state of the EV market, which has seen slower-than-expected growth. U.S. sales are expected to decline after September 30, when the federal tax credit for EV buyers expires.

Market Realities and Consumer Demand

Despite these adjustments, GM remains committed to EVs. The company has expanded its U.S. EV lineup and claims to support measures that foster EV production, including federal tax credits and charging infrastructure development. However, consumer demand for EVs has not met expectations. Last year, EVs accounted for roughly 4% of GM’s total sales, and this year, they made up about 6%.

Barra has acknowledged that the market is still evolving. “The customer was telling us they weren’t ready,” she said during a Wall Street Journal event. This sentiment has influenced the company’s strategy, leading to a more cautious approach to the EV transition.

Historical Context and Future Outlook

GM’s journey with EVs has been marked by both successes and failures. The company’s first electric car, the EV1, was discontinued in 1999 due to high costs and low demand. A decade later, GM launched the Chevrolet Volt, but it too struggled financially and was eventually discontinued.

In 2020, Barra pledged to roll out over 20 new EVs in North America by 2025, investing $27 billion in the process. However, not all executives were convinced of the speed and scope of this plan. Some expressed concerns about the company moving too quickly toward EVs, fearing it could alienate traditional customers.

Despite these challenges, GM has continued to invest in EV technology. The company’s stock surged to record highs in 2021, fueled by optimism about its EV initiatives. However, recent developments have shown that the EV market is more complex than initially anticipated.

Conclusion

As GM navigates the evolving landscape of the automotive industry, it faces a delicate balance between its long-term goals and short-term market realities. While the company remains committed to EVs, its strategic adjustments reflect a recognition of the challenges ahead. As Barra continues to lead the charge, the future of GM’s EV ambitions remains uncertain, but the company is determined to adapt and succeed in a rapidly changing market.