GM optimistic about EVs, despite $150 million hiccup and return of hybrids

WASHINGTON — General Motors Co. built 20,000 electric vehicles earlier this year that did not qualify for the federal EV tax credit, Chief Financial Officer Paul Jacobson said Tuesday.

That could cost the automaker $150 million, thanks to the company’s Ultium Promise program which will pay out a $7,500 credit to all customers anyway.

“Us being there for the customer so that we have a very consistent face, taking the risk on ourselves and then adjusting the supply chain adjusting the manufacturing to make sure that we can comply with (tax credit rules) — that's our responsibility,” Jacobson said.

GM temporarily lost tax credit eligibility for the Cadillac LYRIQ and Chevrolet Blazer EV in January due to changes from the U.S. Treasury Department and Internal Revenue Service.

Despite hiccups like that one, uncertain regulatory conditions moving forward and slowing demand for EVs overall, Jacobson reaffirmed GM’s commitment to EVs and urged patience for that area of its business during a wide-ranging discussion at the Securing American Future Energy summit. John Bozzella, the president of the Alliance for Automotive Innovation, an automotive trade association, led the discussion.

“Some people will draw a linear line. Some of them will draw exponential curves,” Jacobson said of EV adoption. “But the one thing they have in common is they're all smooth. And I want to tell them it's never going to look smooth.”

“It’s going to look like this,” he said, gesturing to indicate a more erratic growth curve. Jacobson emphasized that even though demand has slowed down, it is still growing: “I think a lot of that gets lost in the narrative."

He also emphasized that EV consideration is at an “all-time high.” He suggested that efforts across the industry to promote the new products and positive word-of-mouth testimonials are reaching mainstream consumers, even if they’re not ready to purchase EVs yet.

A survey from J.D. Power from June of last year found that 61% of shoppers are “overall likely” to consider purchasing an EV. That represents a slight increase from the 59% recorded in 2022.

Still, GM has needed to change its approach, he acknowledged: “We stress being nimble in the organization because we know this thing is going to change 100 times between now and 2035 and beyond. We just need to be there to meet the customer where they are.”

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