Major automobile companies are attempting to cut costs associated with electric vehicle (EV) lines and autonomous cars after spending heavily on both, according to CNBC.
Companies such as General Motors (GM), Stellantis and Ford are taking drastic measures aimed at reducing costs, such as enacting layoffs and making production cuts, according to CNBC. Automakers have invested billions of dollars into self-driving cars and EVs, with many now facing prolonged returns on their investments and slow EV adoption, CNBC reported.
The Biden-Harris administration has led a massive push for EV adoption as part of President Joe Biden’s signature climate agenda, including introducing strict tailpipe emissions standards in March. The administration has shelled out billions in federal funding toward the goal of building 500,000 EV charging stations nationwide by 2030, but the initiative has so far been slowed down by various logistical hurdles.
“Western [automakers] are increasingly focusing on capital efficiency, meaning likely lower spending, more collaboration, and restructured EV portfolios to prioritize profits,” Morgan Stanley analyst Adam Jonas said in a September investor note, CNBC reported.
Many automakers have backpedaled EV goals due to a lack of consumer demand, including Ford, which announced in August that it was canceling plans to build three-row electric SUVs, and also announced in October that it was temporarily pausing the production of its F-150 Lightning electric truck model starting in mid-November due to lower-than-expected demand. The automaker has been trying to incentivize consumers to purchase EVs, and announced in September that it would offer free EV chargers and home installations for customers.
GM has been attempting to raise EV sales amid ongoing market struggles, and cut 1,000 jobs in November to trim costs. Meanwhile, Stellantis announced plans to lay off about 400 employees in March, and announced in October that it was recalling over 150,000 plug-in hybrid Jeeps due to a potential fire risk.
President-elect Donald Trump has criticized Biden’s EV agenda, and promised in October 2023 to repeal the Biden-Harris administration’s pro-EV measures, calling them “insane.” Trump has proposed various initiatives related to the auto industry, including a promise to make interest on car loans fully tax deductible in a push to boost domestic auto production.
Trump’s return to the White House could potentially mean major shakeups to the EV industry. The Trump-Vance transition team is reportedly looking to repeal the Biden-Harris administration’s $7,500 tax credit for EVs, according to Reuters. EV sales could plunge nearly 30% if Trump axes the tax credit, according to Yahoo Finance.
“We’ve said for nearly 18 months that our top priorities are improving quality and lowering our costs,” a spokesperson for Ford told the Daily Caller News Foundation.
Stellantis and General Motors did not immediately respond to a request for comment from the DCNF.
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