US giants retreat from new energy: 1,750 jobs cut in the electric vehicle sector, and hydrogen fuel is also abandoned.

The electrification of American cars has hit the brakes, and even the largest car manufacturer in the United States hasn't escaped.

In the recently disclosed third - quarter earnings report, General Motors's profits and full - year guidance both exceeded market expectations. Its stock price soared by more than 14% at one point, marking the largest single - day increase in six years.

The company revealed in the earnings report that half of the credit for this performance improvement goes to the progress of electrification. Whether in the Chinese or American markets, electrification has achieved significant growth.

However, before the applause from the market had subsided, General Motors announced a decision that surprised everyone:

A new round of major layoffs has been launched, affecting thousands of employees, and the cuts are specifically in electric vehicle and battery production capacity.

General Motors Lays Off Thousands, Targeting New Energy

According to official news from General Motors, the company plans to reduce the production of electric vehicles and batteries in the United States and initiate a new round of layoffs.

The layoff scope includes approximately 1,200 positions at the electric vehicle factory in Detroit, the United States, and 550 positions at the Ohio battery factory, a joint venture with the LG brand.

Moreover, this is not the end. Starting from January next year, General Motors will also suspend the production of battery cells at two battery factories in Tennessee and Ohio for up to six months. Approximately 1,550 employees at the battery factories will be temporarily laid off.

Meanwhile, the Detroit electric vehicle factory will also be reduced from double - shift to single - shift operation, and the production capacity is expected to be reduced by about 50%.

It should be noted that this factory produces several of General Motors' high - profile all - electric pickups, including the Chevrolet Silverado EV, GMC Sierra EV, Cadillac Escalade IQ, and Hummer SUV.

In contrast, the news came suddenly and unexpectedly.

Because not long ago, General Motors had just disclosed its third - quarter earnings report, which received a warm response from the market.

The company's Q3 revenue was $48.6 billion, basically flat year - on - year, nearly $1.2 billion more than market expectations; the net profit was $1.3 billion, and the adjusted EBIT was $3.4 billion, both exceeding market expectations.

Based on this, General Motors also raised its full - year guidance:

The adjusted EBIT is expected to be between $12 billion and $13 billion, higher than the Q2 expectation of $10 billion to $12.5 billion; the cash flow from the automotive business is expected to be between $19.2 billion and $21.2 billion, also far exceeding the Q2 expectation of $7.5 billion to $10 billion.

Specifically in terms of business, General Motors revealed that the progress of electrification was particularly prominent, especially in its two major markets - North America and China, where there was a significant acceleration respectively.

In the North American market, General Motors' electric vehicle deliveries increased by 45% year - on - year, reaching a record high, and its market share has reached 16.5%, second only to Tesla.

In the Chinese market, General Motors' new energy vehicle models have also achieved year - on - year growth for ten consecutive quarters. In addition, General Motors has achieved the feat of making a profit in China for four consecutive quarters.

So, why is General Motors laying off employees at this time and targeting the new energy business?

General Motors CEO Mary Barra revealed the company's "difficulties". Simply put, there are two reasons:

One is the slowdown in the popularization speed of electric vehicles in the United States; the other is the change in the regulatory environment and federal incentive policies.

The "federal incentive policy" mentioned by Barra refers to the $7,500 electric vehicle purchase subsidy, which was officially cancelled on September 30 this year.

Therefore, according to General Motors' prediction, compared with the third quarter, the company's electric vehicle sales in the United States may decline in the future.

Recalling when it first announced its entry into electrification, General Motors showed great ambition. It once vowed to stop selling fuel - powered vehicles by 2035 and achieve 100% full electrification.

General Motors also said that it would launch 30 electric vehicles globally before 2025 and planned to invest more than $27 billion in R & D for this purpose.

After all, General Motors is the largest automobile company in the United States and a symbol of "American cars" in the previous era. It has both financial resources and influence.

Moreover, this automobile company actually had the awareness of new energy transformation very early. In 1966, it launched the world's first fuel - cell vehicle. In 1996, it released the EV1 all - electric vehicle, the originator of electric vehicles and the first electric vehicle mass - produced for the mass market in the history of modern automobile industry...

However, as time has passed and the times have changed, the reality is far more cruel than expected, and the popularization speed of electrification in the United States has far lagged behind General Motors' plan.

Before full electrification arrives, the new energy business has brought continuous losses. The company's CFO Paul Jacobson admitted that currently only about 40% of electric vehicle products can make a profit.

So now, General Motors no longer emphasizes the goal of "full electrification by 2035" but instead focuses on "flexibly adjusting production capacity according to market demand".

At the same time, the company is reducing costs by reducing excess production capacity, using common components and new technologies, selling battery factories, and stopping the production of some models. This quarter, it has set aside $1.6 billion for the restructuring of the electric vehicle business.

In addition to layoffs and production cuts, the changes in the hydrogen energy business are also regarded by the outside world as one of the actions of General Motors to slow down in the new energy field... Is General Motors' new energy dream about to shatter?

Can General Motors No Longer Continue with Hydrogen Energy?

Not long ago, many media reported that General Motors decided to terminate the R & D project of the next - generation hydrogen fuel cell of its HYDROTEC brand, and the construction plan of a factory worth $55 million was also put on hold.

In the view of many people, this seems to announce the failure of General Motors' decades - long layout in the hydrogen energy business.

General Motors explained this decision by saying that hydrogen energy still has development potential in specific high - demand industrial application fields such as backup power, mining, and heavy - duty trucks. However, achieving sustainable development is still a long and uncertain road:

The high cost of hydrogen energy in the United States and the limited infrastructure have restricted consumers' acceptance of fuel - cell vehicles.

Therefore, the company plans to give priority to areas with "mature market appeal".

However, Fuel Cell System Manufacturing, a joint venture with Honda, will still operate normally and continue to produce existing hydrogen fuel cells for fixed and industrial uses.

Anyway, even with sufficient preparations, General Motors has still been forced to slow down during the transformation process.

In fact, not only General Motors, but also many automobile companies focusing on the United States have had "electrification anxiety" in the past year. And with the expiration of the purchase subsidy, most automobile companies believe that the demand in the electric vehicle market will decline significantly.

Some analysis institutions even predict that the penetration rate of electric vehicles in the US market may be directly halved from 10% this summer.

What the outside world has already noticed is that this "recession" has spread to many well - known automobile companies. For example, Nissan, Stellantis, Porsche, etc., have all announced the cancellation or postponement of some electric vehicle models.

Sam Fiorani, the vice - president of the research company AutoForecast Solutions, believes that the number of electric vehicle jobs in the US automobile industry will further decrease, production will return to the level of a few years ago, and the selling price will be higher.

But although there is a slowdown, the increase in the penetration rate of new energy vehicles is still a widely recognized view in the market. General Motors' CEO also made it clear that the new energy business remains an important direction for the company's development.

It's just that the protagonist in the automobile industry has changed -

In the previous era, when people thought of "American cars", the first thing that came to mind was General Motors. But now, when you think of "American cars", the first thing that comes to mind may have become that technology company that sells all - electric vehicles, right?

This article is from the WeChat official account "Intelligent Vehicle Reference". Author: Jessica. Republished by 36Kr with permission.