TOLEDO, Ohio — In response to slowing electric vehicle (EV) demand, General Motors (GM) is investing $200 million into its Toledo Propulsion Systems Plant, signaling a significant pivot back to the production of gas-powered vehicle components. This move comes as the automotive industry grapples with changing consumer preferences and a shift in market dynamics.
GM’s announcement revealed that the company will convert one of the plant’s two EV transmission lines to produce parts for gas-powered vehicles. The decision marks a notable change in direction for the automaker, which, like many in the industry, had been betting heavily on the future of electric vehicles. The move is a reflection of how automakers are adjusting to shifting demand and the challenges facing the EV market.
Tony Totty, president of United Auto Workers Local 14, commented on the shift, stating, “The market’s going to dictate what we make. We said that then, we’re saying it now.” According to Totty, two key factors have contributed to the decline in EV sales: a reduction in federal incentives and inadequate infrastructure to support electric vehicles. “When you take the incentives away and you take the infrastructure away, sales are not going to be what we anticipated them to be,” Totty explained.
Despite a nationwide rise in EV sales by nearly 9% in 2024, the growth rate is far below the 47% increase seen in 2023. This slowdown has prompted GM to reassess its production strategy, with a focus shifting toward more traditional internal combustion engine (ICE) vehicles. The company’s investment in its Toledo plant is expected to help sustain local jobs and contribute to the broader economy, even as the industry grapples with these new challenges.
However, the impact on local dealerships remains mixed. At Price Pro in Maumee, General Sales Manager Danny Ruiz noted an uptick in used EV sales, driven in part by tax incentives for qualifying vehicles under $25,000. “We have a used car EV program,” Ruiz said. “Any vehicle under $25,000 — certain years, makes, and models — qualifies for a $4,000 tax credit. So in actuality, we’ve seen an uptick rather than a downtick.”
Nevertheless, Ruiz acknowledged that many customers are still hesitant to fully embrace electric vehicles. “Not everybody has the ability to fit that lifestyle,” he said. “Whether it’s charging capabilities, driving habits, or family needs — it’s not for everyone just yet.” This sentiment is echoed by other industry experts who point to the limitations of current EV infrastructure, particularly the availability of charging stations, as a barrier to widespread adoption.
Despite these challenges, Ruiz remains optimistic about the future of EVs, emphasizing that the infrastructure will eventually catch up. “No one wants to be without a charger,” he remarked, likening the current situation to the early days of cell phone adoption. “Some areas just don’t have the support yet. But with the right planning and technology, that should eventually be a non-issue.”
The decision to invest in gas-powered vehicle production while still supporting EV development reflects the automotive industry’s broader strategy of adapting to consumer demand. As automakers like GM navigate these changes, the future of the industry may involve a hybrid model that balances both electric and traditional vehicles to meet the needs of a diverse consumer base.
In the meantime, GM’s investment in Toledo ensures that the region remains a key part of the company’s manufacturing strategy. The shift in focus to gas-powered parts, while a departure from previous goals, underscores the fluid nature of the automotive industry as it adjusts to evolving market conditions.