The Biden administration‘s goal of reaching 50% of electric vehicle sales within the next six years could ax jobs for those whom the federal government relies on to reach its goal: the assembly workers.
The United Auto Workers‘ strike secured pay raises and benefits last year and projected a strong 2024 for workers of the “Big Three” automakers. However, since the end of 2023, employees at General Motors and Ford plants have experienced layoffs as companies begin to dwindle EV production due to a steady decline in demand.
In December, General Motors told nearly 1,000 workers at the Orion plant in Michigan that they would be laid off until 2025 to make engineering improvements during a period of declining interest in electric vehicles. Thousands of GM workers were slated to begin work on the electric Chevy Silverado pickup truck, and now they are waiting to find out if they are going to have a new job.
“It’s been a very somber moment here the last month,” a laid-off GM Orion plant employee told NBC News in an interview. “We thought we finally got a little bit of a break. We were only supposed to be down for, at most, for a year for retooling, and now GM is revisiting the EV market. I don’t think the economy is hurting — I think the automotive industry is hurting. In my opinion, they put the carriage in front of the horse.”
While EV sales continue to increase, the demand has slowed from its strong pace in 2021 and 2022, causing several automakers, such as Ford and Tesla, to take a step back and project a slowdown in sales. This has also forced companies to roll back plans for EV improvements or the construction of new electric vehicle production plants.
Ford’s earnings projections recently predicted that taking a step away from EV production could cause their profits to soar by 50%. Electric vehicles lost $4.7 billion last year, with the company anticipating the losses to deepen to between $5 billion and $5.5 billion in 2024. In January, the company said it would cut back on production of its F-150 Lightning, eliminating 1,400 workers from the production line in Dearborn, Michigan. Many of the workers would be offered early retirement, reassigned to a different role at the same complex, or transferred to a different gas-powered plant.
The moves occurred after Ford also scaled back investments in the fall of last year. The automaker halted a $3.5 billion investment in an EV battery plant in Michigan in November, stating it would plan to open in 2026 but after “re-timing and resizing some investments.” It also announced in October that it would cut nearly $12 billion in EV costs and postpone a planned battery factory in Kentucky.
“Ultimately it all stems from demand, and demand is just not showing up to where all these CEOs thought. So a lot of the initial targets put out by GM or Ford a couple years ago have maybe proven to be a bit too optimistic and probably too aggressive,” Gabe Daoud, a sustainable energy senior analyst at TD Cowen, told NBC News. “I think everybody was expecting the entire car fleet to change overnight and go electric, but that’s obviously just impossible and impractical.”
Hundreds of workers have also been laid off at electric vehicle battery plants in locations such as Michigan, Georgia, and California. Albemarle, a North Carolina-based company that supplies battery makers with lithium, said in January that it was cutting an unknown number of jobs due to the change in market demand for EVs.
Biden, who has proclaimed himself as “the most pro-union president in American history,” has long been stuck between a rock and a hard place when it comes to electric vehicles — particularly as he was awaiting a much-needed endorsement from the UAW, which the group withheld during strike negotiations. The UAW endorsed the president’s reelection campaign in January.
UAW President Shawn Fain has dismissed any worries from the union regarding Biden’s EV mandate, stating it is “not afraid” of where the industry is headed and that it has always been at the “front of environmental and working-class issues.” However, given the massive layoffs and the workers’ growing uncertainty over the fate of their jobs, it’s possible that the union president’s assessment may not represent the thoughts of rank-and-file union workers.
Orion plant workers were anticipating being laid off for a significant part of 2024 while the plant shifted production for the new electric Silverado, but many were caught off-guard that the layoffs would extend to 2025. This came after Gov. Gretchen Whitmer (D-MI) and GM officials announced in 2022 the company’s plan to spend $4 billion to expand and renovate the Orion plant to focus production on the Silverado.
“It’s very devastating, not only to our workforce, but to the whole community there,” the plant worker said. “Things were growing, things were looking good, and people were happy. We got nothing but support from the township, and all this money was coming in from the state, and then they do this.”
Though GM said the workers would be relocated, the plant worker said the transition to a new job at a new plant could put further strain on workers who were already driving many hours to reach Orion and could not afford a longer commute due to family or child care obligations.
Companies have poured billions of dollars into the electric vehicle industry, spurred by the Biden administration. Demand for EVs has continued to grow, with a record 1.2 million vehicles sold last year — and 317,000 electric vehicles sold in just the fourth quarter of 2023, according to Cox Automotive Inc. However, the growth pace has slowed over the last few years, when America’s auto industry was seeing 70% year-over-year growth in 2021 and 80% year-over-year growth in 2022.
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Many industry analysts say the slowing demand stems from the high price of EVs and the lack of sustainable charging stations. In early January, the Biden administration announced $623 million in grants for new EV chargers across the nation. However, overall consumer concerns over the viability of purchasing and maintaining an EV continue to drive down demand for the vehicles and affect workers’ employment.
“I think what you’re seeing is the slope changing in how fast people are willing to purchase EVs right now because they’re expensive and there is concern about charging infrastructure,” Alan Amici, the CEO of the Center for Automotive Research, said to NBC News. “If you’re an efficient automaker, you’re trying to match your production to demand. It doesn’t do anyone any good to fill up a yard with EVs that are not being sold.”
