General Motors bet big on electric vehicles and now employees are paying the price. We recently saw this play out in Canada, where over a thousand workers lost their jobs when BrightDrop vans were axed last week.

The cuts are now happening stateside as approximately 1,750 workers will be laid off. According to CNBC, the hardest impact will be felt at Factory Zero in Michigan, where around 1,200 jobs will be eliminated. An additional 550 people will be let go at the Ultium Cells plant in Ohio.

More: GM Lays Off Hundreds After Saying Business Is Going Great

On top of the indefinite cuts, there will reportedly be 1,550 temporary layoffs. These are said to be spread across Ultium Cells plants in Ohio and Tennessee, with the latter impacting 700 people.

In a series of statements, the automaker said the changes were “in response to slower near-term EV adoption and an evolving regulatory environment.”

This appears to be a reference to the elimination of the clean vehicle tax credit as well as the relaxing of regulations under the Trump administration.

Factory Zero builds the Chevrolet Silverado EV, GMC Sierra EV, GMC Hummer EV, and Cadillac Escalade IQ. These models weren’t exactly flying off dealer lots even when there was a $7,500 federal incentive.

Promises and Pauses

The company said they remain committed to U.S. manufacturing and believe their “investments and dedication to flexible operations will make GM more resilient and capable of leading through change.”

That remains to be seen, but GM is pausing battery cell production in Warren, Ohio as well as in Spring Hill, Tennessee this January. Both plants are scheduled to reopen in mid-2026 and the downtime will be used to upgrade the facilities to provide “greater flexibility.”

It’s not entirely clear what that means, but the company said “Impacted employees may be eligible to continue receiving a significant portion of their regular wages or salary, plus benefits.”

Corporate Optimism Meets Reality

The news comes roughly one week after CEO Mary Barra told investors the company “delivered another very good quarter of earnings and free cash flow.”

She added the automaker achieved their highest third-quarter market share since 2017 and were raising their full-year guidance.

Despite being upbeat, Barra warned of cuts by saying “it is now clear that near-term EV adoption will be lower than planned. That is why we are reassessing our EV capacity and manufacturing footprint.” Despite this and new investments in ICE-powered vehicles, she said “electric vehicles remain our North Star.”

The removal of the federal electric vehicle tax credit at the end of September is set to cost General Motors as much as $1.6 billion in the next quarter, a direct result of the adjustments it must make to its electric vehicle strategy.

This follows Ford’s recent announcement that it will write down up to $400 million in manufacturing assets and reduce $1.5 billion in EV-related spending, scaling back projects including a three-row electric SUV and a full-size electric pickup.

Industry Recalibration

In its third-quarter report, GM confirmed that its board of directors had approved $1.6 billion in charges tied to what it described as the “strategic realignment of our EV capacity and manufacturing footprint to consumer demand.”

Read: GM Pulls Off Its Strongest US Comeback In A Decade But One Brand Is Slipping

The company specified that $1.2 billion of that amount relates to adjustments in its EV capacity, while the remaining $400 million stems “primarily from contract cancellation fees and commercial settlements associated with EV-related investments, which will have a cash impact.”

GM also noted that “it is reasonably possible that we will recognize additional future material cash and non-cash charges that may adversely affect our results of operations and cash flows.”

GM emphasized that the measures it’s taking will not affect its existing range of electric models sold under the Chevrolet, GMC, and Cadillac brands.

Electric vehicle sales in the United States climbed sharply through the third quarter, yet GM cautioned in its filing that it expects “the adoption rate of EVs to slow” due to “the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations.”

During the July-September period, GM’s sales of electric vehicles rose 107 percent and have increased 105 percent year-to-date. In Q3, it sold a total of 66,501 EVs, and Chevrolet cemented its position as the second-largest EV brand in the country. In addition, the Equinox EV was the best-selling non-Tesla-branded electric vehicle.