General Motors Pulls Funding from Floundering Electric Vehicle Efforts in $10 Billion Bid to Appease Investors
General Motors is reassessing its investment plans in electric vehicles as sales collapse and shareholders fear that the initial headlong dive into EVs was a major mistake.
The massive carmaker is preparing a move to pull back from EVs and reassure investors that the business is still strong despite the slow EV sales, The Wall Street Journal reported Wednesday.
It is yet more evidence that Americans simply aren’t interested in EVs despite the enthusiastic boosterism of left-wing government officials who don’t have to worry about sales figures.
According to the Journal, GM is planning a $10 billion stock buyback, the largest in years, and will fund that buyback by curtailing many of its previously announced investments in EV and self-driving car development.
“[CEO Mary Barra] is trying to jump-start GM’s flailing shares while also refocusing investors on the underlying strength of its main business: selling gas- and diesel-powered trucks and SUVs,” the Journal reported.
In a Wednesday letter, Barra told shareholders that “the profitability and cash generation of our [internal combustion engine] business remains strong.”
GM’s stock has fallen 14 percent this year and hit a three-year low this month, due in part to the auto worker strike that cut its profitability projections from $12.7 billion to $11.7 billion.
One of the first moves the company made to try and right the ship after the strike was to reduce spending on the less reliable EVs. That included delaying the construction of a new electric truck factory and abandoning its stated goal of producing 400,000 EVs by 2024.
GM is also hitting the brakes on the development of its Cruise self-driving car project.
While admitting that “EV demand is evolving more slowly than expected,” Barra insisted that EVs are the future and that sales will grow. This, of course, is simply a feeling, as actual proof is non-existent.
“Our strategy hasn’t changed,” she said during an analyst call on Wednesday, despite the evidence staring her in the face that most Americans don’t want EVs. “Our tactics are changing to align with what’s happening in the marketplace.”
But some automakers are seeing the writing on the wall. Last month, Toyota chairman and former CEO Akio Toyoda said “people are finally seeing reality” as EV sales grind to a halt.
GM is not alone in pulling back from EV production. Ford recently downsized a planned $3.5 billion electric vehicle battery plant, and EV companies both large and small have slashed production targets.
Neither are carmakers the only ones realizing how problematic EVs are.
Insurance companies have discovered that EVs are less reliable, making them more expensive to insure. Meanwhile, car dealers have been desperately offering discounts and attractive leases to try and cajole customers into taking an EV off the lot.
According to The Blaze, a coalition of almost 4,000 car dealers recently issued an open letter urging the federal government to “tap the brakes” on its “unrealistic” EV mandates.
Electric vehicles are simply not the panacea that Joe Biden and his climate change co-conspirators are claiming. And as each month passes, more and more people are realizing the truth.
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