A factory once hailed as a political trophy has become a symbol of the electric vehicle industry’s growing pains. General Motors is cutting hundreds of jobs at its Ultium Cells battery plant in Lordstown, Ohio, along with deep reductions at other facilities, as the company confronts a sharp downturn in EV demand following the expiration of the $7,500 federal tax credit.
GM said it will lay off 550 workers in Lordstown and place another 850 on temporary layoff. It also will cut 1,200 positions at its Detroit “Factory ZERO” assembly plant and put 700 employees at its Ultium facility in Spring Hill, Tenn., on temporary layoff effective January 2026. The company called the cuts “in response to slower near-term EV adoption and an evolving regulatory environment,” saying it is committed to its U.S. manufacturing footprint.
The plant in Lordstown carries a politically charged history. Once a high-volume assembly plant, producing over 1,000 vehicles daily, it was championed by Donald Trump in 2017 as a cornerstone of American manufacturing revival. “They’re all coming back. They’re coming back,” Trump told rally-goers near the plant. But in 2019, GM shuttered the facility as part of a broader restructuring, selling it and later converting it into a battery cell plant in partnership with LG Energy Solution in 2022.
The layoffs further put into focus how fragile the U.S. EV transition has been, dependent upon federal incentives to bridge the chasm in prices with internal combustion vehicles. Leading up to the end of the tax credit on October 1 under the One Big Beautiful Bill Act, almost 90% of new EV buyers received subsidies. At an average price for new EVs of $57,245-about $9,000 more than gasoline-powered cars-the removal of incentives hit the market almost immediately. EV sales, surging to a record 12.9% of retail market share in September, fell back to just 5.2% in October according to J.D. Power.
Data from Cloud Theory indicates that sales of EVs have dropped 74% since their peak in 2025, immediately after the credit expired. Analysts said the decline is partly due to “pull-ahead” buying in months leading up to the deadline, but the broader trend points to a slower adoption curve. The EY Mobility Lens Forecaster estimates that US EV market share will fall back to about 8% in 2026, pushing the 50% adoption milestone to 2039-five years later than previously expected.
The pause in production at Ultium Cells also will have a cascading effect on GM’s battery supply chain. At the heart of GM’s EV strategy, the Ultium platform leverages large-format pouch cells featuring nickel-cobalt-manganese-aluminum chemistry to provide increased energy density and improved thermal stability. The modular architecture allows for flexible vehicle integration-from compact SUVs to full-size trucks. But scaling up production depends on stable demand forecasts, and the current slowdown forces GM to recalibrate capacity to avoid absorbing fixed costs on underutilized lines.
The ripples are being felt throughout the industry, as Ford delays EV launches, Tesla warns of “rough quarters” ahead, and Stellantis refocuses on hybrids. In the U.S., meanwhile, hybrids are gaining traction as a bridge technology-EY forecasts they will comprise 34% of passenger vehicle sales by 2034. For many consumers, hybrids offer fuel savings without the range anxiety or charging infrastructure challenges that still constrain EV adoption.
State-level policies remain uneven: California leads the nation with a 22% registration rate for EVs, while rural states are far behind. Recent federal moves to revoke California’s authority to set tighter emissions standards threaten to slow uptake in high-uptake regions even further. Charging infrastructure expansion-703 high-speed stations in Q2 2025-comes amidst headwinds, with tax credits for refueling property set to expire mid-2026.
We need to make sure that we rightsize the capacity footprint to be able to not have to absorb a lot of those fixed costs, GM CFO Paul Jacobson told investors. CEO Mary Barra wrote to shareholders, With the evolving regulatory framework and the end of federal consumer incentives, it is now clear that near-term EV adoption will be lower than planned.
Though the company projects that production of battery cells will likely resume by mid-2026, the move is a reminder of just how closely EV manufacturing economics are pegged to policy. The future of the Ultium platform rides on market recovery and the speed of domestic supply chain build-out-a path GM is also treading with partners LG and Samsung to reduce reliance on Chinese imports.
