General Motors has managed a few storms over its long history including the 1970’s oil crisis, the 1980’s Japanese vehicle onslaught, the 2008-2009 financial crisis and survived the Covid 19 pandemic shutdowns. Currently GM has a diverse EV and Hybrid line-up along with its conventional ICE vehicles.
The challenge of adapting to a rapidly evolving market, including the rise of EVs, technological advancements, and changing consumer preferences, while navigating economic pressures and supply chain issues could arguably be America’s largest automaker toughest test yet.
GM will need to invest heavily in EV infrastructure, battery technology, and production capabilities. The development and deployment of autonomous driving technologies present both opportunities and huge challenges, including safety concerns, regulatory hurdles, and the need for even more skilled labour.
Cars are becoming increasingly connected and software-driven, requiring focus on cybersecurity, data management, and software development. Weak global economic growth, higher interest rates, and potential recessions could dampen demand for vehicles.
Rising material costs, labour shortages along with supply chain disruptions could lead to higher production costs and reduced profitability.
Not to mention trade wars, political instability, and supply chain disruptions could further destabilize the market. This would also include the competition from the Chinese manufacturers as they tend currently to compete on price.
The auto industry has entered a time that is dealing with software-defined vehicles and autonomous technology. An example would be that Tesla has applied for a Robo taxi permit in California, setting the stage for a rivalry with Waymo and Uber and we are seeing the finish of subsidies for the purchases of EV vehicles.
General Motors has spent billions on building its EV programs. GM has 10 EV models using its Ultrium battery and propulsion system, from the Equinox EV through to the Hummer EV.
It is true that they have experienced software and production troubles and worked hard in 2024 to recover the ground that was lost. They are now the second best-selling U.S. EV maker in the final quarter of 2024, with sales volumes just behind Tesla.
Model variety and GM policy has played a role; however, GM has benefited from the government rebate credits. New government policies by President Trump’s administration are threatening to repeal these credits and they have pledged to move forward with the 25% tariffs on imports from Mexico. That will be a direct hit to GM, as two of its best-selling EV’s, the Equinox EV and Blazer EV are both made outside the U.S. With the dropping of the tax credit and the addition of tariffs, prices of these two EV’s will increase, reducing GM’s margins and discouraging new buyers.
If GM can weather these challenges and utilise the correct strategies, it can emerge as a solid contributor in the EV market. There may be several reasons why that can happen. GM is close to reaching profit positive on its EV business according to some reports. One positive for EV manufacturers relates to the falling cost of battery manufacture.
Lithium prices are falling as there are now ten new battery plants coming online in 2025. That could soften the financial blow of the impending tariffs and potentially lost government incentives. General Motors will still need to continue to rely on a safety net tied to its highly profitable petroleum truck and SUV business. That business isn’t going anywhere anytime soon. In fact, that’s only growing. Still, the uncertainty is like a wrecking ball. We’ll see whether GM’s EV ambitions keep growing or hit a wall.
April 2025
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