The US electric vehicle market hasn’t taken off as well as many expected.
After years of government subsidies and companies growing on their own, 2025 was the year EV dreams collided with reality.
Consumers flocked to car dealerships in record numbers to buy EVs before a $7,500 tax credit expired in September.
2025 (by September): More than 1 million units, 10.5% market share
2024: 1.3 million, 8.1% market share
2023: 1.2 million, 7.8% market share
2022: 800k 5.8%, market share
Source: Cox Automotive
But even that buying rush showed some cracks.
US consumers bought 90 different EV models in the third quarter, but only nine sold more than 10,000 units.
The Tesla Model Y and Model 3 were the top sellers, moving more than 114,000 and 53,000 vehicles, respectively, and the Chevy Equinox sold just under 25,000.
But those three models were outliers.
“Most EVs sell at less than 2,000 units per month or 6,000 units a quarter. In the volume-driven business of automotive manufacturing, low volume is the enemy; EV profitability is a distant dream for almost every automaker,” according to Cox Automotive.
With that writing on the wall, original equipment manufacturers like General Motors are rethinking their EV strategy.
General Motors has said it and other OEMs will lose billions of dollars in money invested in electric vehicles due to changes in government policy.
“Following recent U.S. government policy changes, including the end of certain consumer tax incentives for EV purchases and a reduction in the tightening of emissions regulations, we expect the adoption rate of EVs to slow,” GM said in an 8-K filing in October.
GM is willing to pay billions to license its EV product.
The company’s board of directors approved third-quarter charges to match consumer demand for a “planned strategic restructuring of our EV capabilities and product footprint” at GM North America.
As a result, General Motors will lay off more than 1,000 workers at Factory Zero, its all-EV assembly plant located in the Detroit-Hamtramck, Michigan area.
GM also said it would reduce factory production to one shift.
But its EV product rights didn’t end there. On Monday, January 5, workers at the Lordstown, Ohio, plant where some of GM’s EV fuel cells are manufactured received similar bad news.
General Motors will no longer operate the Lordstown, Ohio, assembly plant it sold in 2019. However, the company still maintains operations at the plant site, including Ultium Cells, which produces batteries for its electrified vehicles.
General Motors sent a letter in October saying there would be “mass layoffs of GM hourly-represented employees” at the Lordstown plant scheduled to begin Jan. 5.
Related: Ford, General Motors get troubling news on car sales
More than 1,300 employees will be affected, with temporary layoffs for 850 employees. However, hundreds of jobs at the altium cell battery plant in Lordstown are likely to be eliminated permanently.
According to the company, most of the workers laid off from Lordstown are battery assembly operators. General Motors said it will use production slowdowns and a lean workforce to upgrade facilities.
“Over the past several years, our portfolio and capacity plans have been shaped by continually increasing regulatory strictures for fuel economy and emissions. To meet these requirements, we aggressively expanded our electric vehicle capacity,” CEO Mary Barra said in the letter.
“However, with the evolving regulatory framework and the end of federal consumer incentives, it is now clear that near-term EV adoption will be less than planned. So we are reassessing our EV capacity and production footprint … By acting quickly and decisively to address excess capacity, we hope to reduce losses in EV26.”
In addition to 142 quality operators and 102 materials operators, 1,090 battery assembly operators have been laid off, according to documents filed with the Ohio Department of Job and Family Services, as seen by local NBC News television affiliate WFMJ 21.
General Motors recorded a non-cash loss charge of $1.2 billion in the third quarter, as it is in the process of adjusting its production capacity. The company took an additional $400 million in contract cancellation and commercial settlement fees.
However, that number could increase as GM says it continues to reassess EV capacity, manufacturing footprint, and battery component manufacturing, “and it is reasonably possible that we will recognize additional material cash and non-cash charges in the future.”
GM isn’t the only company that will lose billions on electric vehicles this year.
Ford expects a loss of more than $5 billion on its electric vehicle division, the Model E, this year.
For the US, battery electric vehicle (BEV) sales are traveling in the right-hand lane, while China and Europe are in the passing lane, and this is despite a strong year for US EV sales.
According to JD Power, electric vehicles are on track to surpass 12% market share in the U.S. for the first time, following a 2.6% year-over-year increase in sales.
However, the US market (1.2 million) is still much smaller than China (6.4 million) and Europe (2.2 million).
RELATED: Ford, GM take issue with Elon Musk’s special treatment
This story was originally published by TheStreet on January 6, 2026, where it first appeared in the Automotive section. Add TheStreet as a preferred source by clicking here.
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