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General Motors Urges Lawmakers to Block EV Mandate as EV Demand Slows
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General Motors Company (GM - Free Report) is urging lawmakers to block California’s strict zero-emission vehicle mandate, signaling a significant reversal in the automaker’s stance as demand for electric vehicles (EVs) in the United States begins to slow, per the Wall Street Journal.
Per an internal email sent by GM to thousands of salaried employees last week, emissions regulations that are not aligned with market conditions threaten the company’s business by limiting consumer choice and making vehicles less affordable.
Once a supporter of California’s plan to phase out gas-powered vehicle sales by 2035, GM is now lobbying against it. The company is encouraging employees to contact Senators to revoke California’s waiver, which permits the state to enforce stricter emissions rules. These rules have been adopted by 11 other states. GM had previously aligned its EV strategy with California's goals, but declining EV demand and market pressures have prompted a strategic shift. GM carries a Zacks Rank #5 (Strong Sell) at present.
California aims for 35% of all new vehicle sales to be electric or plug-in hybrid (PHEV) by 2026. However, in the first quarter, EVs accounted for 20.8% of sales and PHEVs 3.7%, totaling 24.5%, which is roughly 10 percentage points below the target and slightly down from the previous quarter.
As EV sales fall short of projections, major automakers like GM and Ford Motor Company (F - Free Report) are scaling back their EV initiatives. GM has abandoned its plan to produce 400,000 EVs by mid-2024 and postponed several key launches as consumers prefer more affordable options and federal tax incentives face potential rollbacks.
In the first four months of 2025, Ford’s EV sales declined 2.9% year over year to 27,409 units. Also, the company's Model e segment, which features all-electric models, continues to struggle amid stiff competition, pricing pressure and significant costs associated with new-generation EV development. After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs. The company is expected to incur huge losses in its EV business this year as well.
Another auto giant, Tesla, Inc. (TSLA - Free Report) , is also struggling with falling demand for EVs. In the first quarter, Tesla deliveries fell 13% year over year to 336,681 units. Automotive margins are also on the decline amid falling volumes and generous discount offers. The metric came in at 11.3% in the first quarter of 2025, down from 15.5% reported in the corresponding quarter of 2024.
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General Motors Urges Lawmakers to Block EV Mandate as EV Demand Slows
General Motors Company (GM - Free Report) is urging lawmakers to block California’s strict zero-emission vehicle mandate, signaling a significant reversal in the automaker’s stance as demand for electric vehicles (EVs) in the United States begins to slow, per the Wall Street Journal.
Per an internal email sent by GM to thousands of salaried employees last week, emissions regulations that are not aligned with market conditions threaten the company’s business by limiting consumer choice and making vehicles less affordable.
Once a supporter of California’s plan to phase out gas-powered vehicle sales by 2035, GM is now lobbying against it. The company is encouraging employees to contact Senators to revoke California’s waiver, which permits the state to enforce stricter emissions rules. These rules have been adopted by 11 other states. GM had previously aligned its EV strategy with California's goals, but declining EV demand and market pressures have prompted a strategic shift. GM carries a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
California aims for 35% of all new vehicle sales to be electric or plug-in hybrid (PHEV) by 2026. However, in the first quarter, EVs accounted for 20.8% of sales and PHEVs 3.7%, totaling 24.5%, which is roughly 10 percentage points below the target and slightly down from the previous quarter.
As EV sales fall short of projections, major automakers like GM and Ford Motor Company (F - Free Report) are scaling back their EV initiatives. GM has abandoned its plan to produce 400,000 EVs by mid-2024 and postponed several key launches as consumers prefer more affordable options and federal tax incentives face potential rollbacks.
In the first four months of 2025, Ford’s EV sales declined 2.9% year over year to 27,409 units. Also, the company's Model e segment, which features all-electric models, continues to struggle amid stiff competition, pricing pressure and significant costs associated with new-generation EV development. After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs. The company is expected to incur huge losses in its EV business this year as well.
Another auto giant, Tesla, Inc. (TSLA - Free Report) , is also struggling with falling demand for EVs. In the first quarter, Tesla deliveries fell 13% year over year to 336,681 units. Automotive margins are also on the decline amid falling volumes and generous discount offers. The metric came in at 11.3% in the first quarter of 2025, down from 15.5% reported in the corresponding quarter of 2024.