General Motors lays off 5,500 workers amid slowing EV demand and tax credits end

General Motors Co. (GM) has announced layoffs affecting roughly 5,500 employees across its electric vehicle and battery plants in the United States, as the automaker scales back production following a sharp decline in demand for battery-powered cars.

The move comes on the heels of President Donald Trump’s decision to eliminate federal tax credits that had supported EV purchases.

Factory Zero operations scaled back

The largest impact will be felt at GM’s Factory Zero facility in Detroit, where the company produces the Chevrolet Silverado EV, GMC Sierra EV, and Hummer EV models.

The plant had previously furloughed 3,400 workers over the summer as production levels were reassessed.

GM said Wednesday that about 1,200 of those employees will return in January when operations resume on a single shift, while the remaining 2,200 workers will remain on indefinite furlough.

The decision reflects GM’s continuing struggle to balance its electric vehicle ambitions with cooling market demand.

The company has repeatedly slowed or paused EV production at its Detroit facility as consumer interest wanes and costs remain high.

The reduction to a single shift is part of a broader effort to align output with revised sales projections.

Battery plant layoffs in Ohio and Tennessee

In addition to the cuts in Detroit, GM confirmed layoffs at its Ultium Cells battery manufacturing facilities, which are operated through joint ventures.

About 1,400 workers in Warren, Ohio, and 710 in Spring Hill, Tennessee, were notified of layoffs.

According to GM spokesperson Kevin Kelly, around 850 employees in Ohio may return to work in May, depending on production needs.

However, 550 of those layoffs are expected to be indefinite. In Tennessee, the 710 layoffs are classified as temporary.

These battery plant reductions underscore how closely tied GM’s EV output is to consumer demand.

The slowdown in electric vehicle adoption has led the automaker to temporarily halt or scale down production across several facilities.

EV strategy reevaluation and financial impact

GM’s latest round of layoffs marks another step in the company’s ongoing reassessment of its electric vehicle strategy.

While CEO Mary Barra had committed $35 billion toward EV and autonomous vehicle development, recent market and policy shifts have forced GM to rethink that investment.

The elimination of a federal tax credit worth up to $7,500 per EV purchase at the end of September dealt a major blow to consumer affordability, already a key challenge in the sector.

GM had lobbied to preserve the credits and sought to lower prices to sustain demand, but sales momentum had already been weakening.

In its most recent quarterly earnings, GM reported a $1.6 billion charge tied to its EV operations and warned of additional write-downs in the fourth quarter as it continues to realign production.

The company also cut more than 200 salaried positions at its Tech Center in Warren, Michigan, earlier this week, signaling further cost-control measures.