Trump's policies impact the electric vehicle business: General Motors lays off 1,700 employees, 5,500 workers on unpaid leave.

From the cancellation of electric vehicle tax credits to the increase in industry tariffs, the Trump administration’s policy shift has forced the American auto giant General Motors to substantially scale back its electric vehicle operations, resulting in thousands of workers losing their jobs or being forced to take leave.

On Wednesday the 29th, Eastern Time, it was reported that GM informed three of its factories that about 5,500 employees were at least temporarily laid off, forcing workers to take unpaid leave due to the company reassessing electric vehicle production demand. On the same day, new reports surfaced that GM would cut thousands more jobs, affecting both EV production lines and battery plants.

On Wednesday, General Motors confirmed to the media that about 1,700 jobs would be cut in Michigan and Ohio states. Of those, about 1,200 positions would be eliminated at the Detroit EV plant in Michigan, and the Ultium battery plant in Ohio would see 550 permanent layoffs and 850 temporary layoffs. Additionally, the Tennessee Ultium battery plant will temporarily lay off 700 workers.

These temporary and permanent layoffs highlight the impact of Trump administration policies on traditional automakers’ electrification strategies. The U.S. federal government officially canceled the $7,500 tax credit per EV purchase at the end of September this year, while tariff policies raised production costs, forcing GM to significantly adjust its business under dual pressures of rising costs and weakening demand.

Massive Workforce Cuts at EV Plant, Suspension of Battery Manufacturing

The situation at GM’s Detroit Factory Zero is most severe. The facility produces electric Chevrolet Silverado, GMC Sierra, and Hummer EVs; 3,400 workers had already been forced into unpaid leave this summer. The 5,500 unpaid leave mentioned this Wednesday includes those from this plant.

GM stated on Wednesday that it will assess required production capacity and recall about 1,200 workers when Factory Zero returns to single shift operation in January next year. The remaining 2,200 will be on indefinite unpaid leave. This means the factory will scale down from two shifts to one, with a significant cut in capacity.

The battery manufacturing sector is also seriously affected. GM spokesperson Kevin Kelly said around 850 workers at the Warren, Ohio plant could return by May next year, while 550 face indefinite layoffs.

GM also announced that starting from 2026, or January next year, production at battery plants in Ohio and Tennessee will be suspended, with operations expected to resume by mid-next year. The idle time will be used to upgrade facilities.

Setbacks for Electric Vehicle Strategy

These reductions reflect an overall contraction at GM. Even before the Trump administration terminated the tax credit in September, EV sales growth had already slowed.

Many automakers, including Tesla, saw record single-quarter EV sales in the third quarter of this year, mainly because consumers rushed to purchase before the tax credit expiry at the end of September. This sales surge is attributed to “overdrawn demand” considered unsustainable.

Under CEO Mary Barra, GM invested $35 billion into plug-in technology, but this strategy has recently been significantly scaled back. GM booked $1.6 billion in EV investment charges in the third quarter and warned that more charges would be incurred in the fourth quarter.

GM’s CFO Paul Jacobson told the media last week: “We still believe EVs have a strong future and we have a highly competitive product portfolio, but we do need some structural adjustments to ensure we lower the production costs of these vehicles.”

The news of GM laying off about 200 workers was already reported last Friday. At that time, the layoffs mainly targeted engineers at Warren Global Technical Center in Michigan, mostly computer-aided design engineers.

GM did not confirm an exact layoff count in last Friday’s statement, instead saying the layoffs are “part of restructuring the design engineering team to strengthen core architecture design engineering capabilities.” Media reported that GM informed those laid off that the job cuts were due to “business conditions” and not their personal performance.

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