Reed’s view
General Motors announced in a regulatory filing Tuesday that it was taking a $1.2 billion charge on its struggling electric vehicle business.
The subtext of its filing is just how much governments at every level dictate GM’s product road map, and has similar implications for tech overall.
A few years ago, GM thought gas-powered vehicles were going to be essentially outlawed in major US markets. Now, the $7,500 tax credit that made EV economics work is going away, and emissions standards, at least in the US, are being relaxed. GM has done its share of lobbying, too.
So the automaker is slowing its EV rollout, while reckoning with steel tariffs that favor foreign rivals, even as it frets about the ascendant Chinese auto industry.
GM’s woes are the product of an American industrial policy that … is clearly not working the way industrial policy is supposed to. If you’re going to dictate what products your companies make, you can’t keep changing your mind between administrations.
But that’s now happening across tech, where the previous administration fought US companies in some areas and supported them in others. The current White House has different priorities, producing a regulatory whipsaw that is going to force companies to waste money and resources — even as they hasten to praise our wise leaders, whoever they happen to be.
In this article:
Room for Disagreement
Former Ford CEO Mark Fields said on Tuesday that car companies “went full bore” into making EVs without a clear understanding of consumer demand, adding that he expects GM to take further charges in the future. “This is clearly an issue where the market didn’t develop the way automakers thought,” he added, suggesting that changing White House policies aren’t completely to blame.
Notable
- GM’s 2035 goal for electric vehicles “was aspirational” and “more an idea than a strategy,” Alan Baum, an auto analyst from Detroit, told Politico. “GM’s doing a better job than many of their competitors, but there’s obviously a relatively low ceiling because of the lack of supportive policy.”
- The Trump administration’s rollback of EV incentives is not all bad for GM, like for many of its legacy peers: They can now go back to relying more heavily on their internal combustion engine vehicles and keep more of the profits, Bloomberg energy columnist Liam Denning wrote.