NLPC has repeatedly highlighted the impracticality of electric vehicles (both in recent years and during the Obama administration). Now, following Ford‘s announcement last month that it would take a $19.5-billion write-down on its EV investments, General Motors informed its investors on Thursday it will take a $6-billion charge for the same reasons. Bloomberg reports:
The announcement Thursday brings the total writedowns from GM’s huge bet on battery-electric cars to $7.6 billion, following smaller charges revealed in October. While the automaker warned of an additional financial toll this year, the moves are aimed at minimizing the impact on reported profits going forward…
GM and its rivals have invested billions of dollars in EVs over the past decade to comply with stringent environmental rules and meet their own overwrought view of consumers’ willingness to buy them.
[President Donald] Trump’s signature tax and spending bill scrapped $7,500 federal tax credits for EV buyers, further dampening demand for battery-powered cars that was already faltering.
Ascribing the automakers‘ woes to “stringent environmental rules” compliance lays the blame on government, when Ford CEO Jim Farley and GM CEO Mary Barra (pictured above) both lobbied hard for the regulations. More from Bloomberg:
GM had boasted of its $35 billion investment to build an EV business capable of selling a million plug-in cars per year by 2025. Chief Executive Officer Mary Barra even set a goal for the company to go all-electric by 2035.
Instead, it sold about 170,000 EVs last year and is now cutting production and workers. The company has already placed 5,500 workers on at least temporary furlough.
The write offs are the culmination [of] Barra’s big gamble that Americans would embrace EVs as quickly as the Biden administration wanted to see the vehicles become a mainstay on America’s roads. The company has more models than it can sell now and had planned more. Add in more than $10 billion invested in its former Cruise robotaxi business and GM has spent a lot on technology that only lost money.
In spite of that, Barra’s GM has been very profitable through tough times. The pullback in EV sales has only drawn investors to buy the stock. Before the late decline, the shares closed at a record of more than $85 a share on Thursday, the highest since GM went public in 2010 after emerging from bankruptcy the year before.
Bloomberg’s attempt to rehab Barra’s [mis]management image is pathetic. During her Biden-era obsession with EVs, GM’s price mostly languished below $40/share, following a brief bump to the $60 range during the administration’s first full year. Shares never rose much above $40 before Biden assumed office, residing mostly in the $30-$40 range during her tenure (which began in 2014). The stock’s real ascent to its current level only began over the last few months, after news reports emerged that the company was moving away from EV production and emphasizing internal combustion engines again.
Thus Barra was forced to swallow hard on customers’ rejection of her EV strategy and then she turned back to gasoline-powered vehicles. Of course investors are going to jump in when you start selling products people actually want — a decision Barra was forced into. She still says EVs are GM’s “North Star” (another corporate-speak cliche’), so she still doesn’t deserve to keep her job.
