Fate of GM's 1 million EV production target now uncertain

New comments from General Motors CEO Mary Barra cast substantial doubt on the company’s plans to reach an EV manufacturing capacity of 1 million units by 2025, despite making aggressive production expansions over the last two years.

Barra’s comments

• Speaking at a CNBC event on July 15, the GM chief remarked “We won’t get to a million just because the market is not developing, but it will get there. We’re going to be guided by the customer.” The comments were in response to a question that asked whether the automaker would build 1 million EVs in 2025.

• The exact meaning of Barra’s comments has yet to be confirmed. GM’s target was to reach an EV production capacity of 1 million units by 2025, not necessarily to build 1 million units, a fact that CNBC pointed out after discussing the matter with a company spokesperson. However, that individual went on to emphasize that the brand “would no longer reiterate” its capacity target, focusing instead on maintaining flexibility to meet demand.

• Nevertheless, Barra’s comments mark one of the first times the automaker’s production capacity targets have been called into question.

Recent months have seen a plethora of EV projects suspended or canceled, as automakers continue to adjust to the market’s slower-than-expected growth. For instance, Vietnamese car manufacturer VinFast pushed back the launch date of its North Carolina factory to 2028 last Friday. Nissan similarly postponed plans in May to expand EV production at its Mississippi facility, effectively delaying the launch of five new electric models.

Much like GM, both automakers attribute their decisions to the current market landscape and the need to keep production in pace with actual demand.

Bottom line: It’s not surprising to see GM set more realistic expectations for its electrification strategy. At the same time, the core challenges to EV adoption, driving range, charging infrastructure and affordability, remain unanswered. Regardless of whether automakers ramp up production, consumer demand won’t grow until these critical issues are resolved.

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