Why GM Is Reducing EV Production Right After Its Strongest Month of Electric Vehicle Sales | Carscoops

      The company will halt electric vehicle production in Tennessee and postpone plans in Kansas as shifts in policy disrupt demand forecasts.

      GM will stop production of the Cadillac Lyriq and Vistiq starting in December 2025. The Tennessee facility will operate on a single shift with temporary layoffs due to decreased output, and Chevrolet is also delaying the launch of a second shift for the next-generation Bolt at the Kansas City factory.

      American auto policy is once again in a state of uncertainty, affecting production schedules. General Motors is among the first major companies to react by pausing the production of two electric models in December and reducing output into 2026, leading to temporary layoffs.

      This decision is influenced by policy changes from the Trump administration, which eliminated the federal EV tax credit and lifted penalties for automakers who fail to meet fuel efficiency standards. With fewer incentives available, manufacturers may be more inclined to focus on gas-powered vehicles.

      As reported by Reuters, GM's production cuts will initiate in October and November when the assembly plant in Spring Hill, Tennessee, responsible for the Cadillac Lyriq and Vistiq, will close. Production of these two models will also be halted in December.

      Additionally, production at this plant will be significantly reduced through the first five months of 2026, resulting in temporary layoffs for employees on one of the two shifts.

      Impact on Other Facilities

      The repercussions are not limited to the Tennessee location; GM has also decided to indefinitely delay the initiation of a second shift at its plant near Kansas City. This facility is set to produce the next-generation Chevrolet Bolt, expected to start production later this year. Although this delay is not anticipated to affect the launch of the new Bolt, it does indicate that GM will not increase production as much as originally intended.

      Sales Momentum and Caution

      GM's electric vehicle lineup has been seeing growth, with August marking its highest EV sales month ever at 21,000 units. However, much of this increase is linked to the final days of the $7,500 federal tax credit, which expires at month’s end. Absent that incentive, demand for electric vehicles is likely to diminish.

      The company indicated that these changes relate less to immediate EV demand and more to preparing for a general deceleration in industry growth. In a statement to Reuters, GM expressed that it is "making strategic production adjustments in alignment with anticipated slower EV industry growth and customer demand by utilizing our adaptable ICE and EV manufacturing capabilities."

      Nonetheless, executives stress that the automaker is not entirely stepping back from electrification, or they may simply be projecting confidence. According to Duncan Aldred, GM's head of North America, “the strength of our ICE portfolio will continue to differentiate our brands and provide us with the flexibility and profitability that EV-only companies do not possess.”