GM Says EVs Are the End Game — But Tax Credit Cuts Just Made Them More Expensive for Buyers

General Motors maintains that electric vehicles are still the future.

The destination is clear. The road, however, has just become far more expensive.

As EV prices rise and incentives disappear, buyers are being asked to believe in a vision that no longer comes with significant financial support. That tension now sits at the heart of America's electric car transition.

A Bold Claim at an Awkward Moment

Mary Barra, the CEO of General Motors, was very confident in her speech to a Detroit audience this week regarding the automaker's future with electric vehicles (EVs). She believes EVs are the ultimate product for consumers.

Barra's statement came just a day before Donald Trump visited Michigan, serving as a symbolic moment in an automotive industry increasingly influenced by political, governmental, and financial factors.

GM delivered a clear message: while it has slowed its pace of EV production, it will not halt production altogether.

The Tax Credit That Changed Everything

The impact of the removal of federal tax credits (£7,500) for electric vehicles last year, along with revisions to fuel economy regulations that fostered a belief in an electric future, was immediate.

GM had planned to sell a record number of electric vehicles through 2025. However, once all incentives disappeared in the last quarter of 2025, consumer hesitancy grew.

As a result, monthly payments for EVs increased, and the sense of progress associated with EV adoption diminished. Instead, EVs began to feel more like luxury items again, without the cushion of federal assistance.

Barra's Optimism Versus Buyer Anxiety

Despite these challenges, Barra remains optimistic.

She asserts that the ultimate goal remains unchanged. While reaching that destination may now take longer without financial incentives, she is confident in her reasoning, citing consumer behaviour: once someone becomes an EV owner, they rarely go back to petrol-powered vehicles.

Barra notes that first-time EV buyers are 80% more likely to purchase another EV. While that figure may be accurate, it's crucial to focus on these first-time buyers, as they are most affected by the new economic realities.

A Wider Industry Retreat

GM is not alone in facing financial difficulties. Ford Motor Company reported losses exceeding $19 billion after reducing EV production, particularly for the Ford F-150 Lightning electric truck. Meanwhile, PSA Group's Stellantis has gone further, eliminating its entire plug-in hybrid-electric vehicle (PHEV) line in North America.

Just a few months ago, models like the Jeep Wrangler 4xe and Grand Cherokee 4xe were among the best-selling PHEVs in 2025. However, as public policy support wanes, consumer confidence in purchasing new EVs has rapidly declined.

Why Hybrids May Make a Comeback

The retreat from full EVs may ironically lead to a resurgence of hybrid technologies, which EVs were initially designed to replace.

Currently, GM does not sell any hybrid or plug-in hybrid vehicles in the US, except for the Corvette E-Ray. However, that could change soon.

Mary Barra has indicated that GM might consider expanding its hybrid line-up if it makes financial sense. GM's decision to offer hybrids again will be driven by practicality, not ideology.

For those unable to afford a full EV, hybrids offer a viable alternative—lower emissions, lower cost, and reduced risk.

The Political Shadow Over Electric Cars

The significance of Donald Trump's visit to Detroit underscores a new reality.

The goal of establishing an all-electric marketplace by 2030 is now uncertain. Regulations have been relaxed, shifting responsibility from government mandates to consumers themselves. The financial burden of transitioning to electric vehicles has been transferred to buyers, making the task of convincing consumers a formidable challenge.