General Motors is no stranger to navigating storms. It survived the 1970s oil crisis, managed to stay relevant after the onslaught of Japanese automakers in the 1980s, got a colossal bailout from the U.S. government after the 2008-2009 financial crisis, survived the pandemic and now offers the most diverse electric lineup of any legacy automaker in the U.S. But 2025 could be a different beast altogether for America’s largest automaker and arguably one of its toughest tests yet.
Welcome to the Friday edition of Critical Materials, your daily dose of news and events shaping up the world of electric cars, software-defined vehicles and autonomous tech. Also on our radar today: Tesla has applied for a robotaxi permit in California, setting the stage for a rivalry with Waymo and Uber. Plus, we explain why some EV buyers may not be able to redeem their federal clean vehicle tax credits this year. Let’s begin.
30%: GM’s Tough Road Ahead Amid Trump’s Tariffs
GM CEO Mary Barra with the 2024 Chevrolet Equinox EV
Not to sound alarmist, but 2025 is shaping up to be a high-stakes year for GM. The automaker spent billions on scaling up its EV programs and now it offers the most variety of any automaker in the U.S. GM has 10 EVs riding on its Ultium battery and propulsion system, ranging from the $35,000 Chevy Equinox EV all the way to the $100,000 GMC Hummer EV.
It’s also selling Chevy, Cadillac and GMC EVs at a record pace. After a rocky start plagued with software and production troubles, the automaker staged a remarkable comeback in 2024, selling 114,432 EVs and eating into Tesla’s declining market share. That made it the second-best-selling EV maker in the final quarter of 2024, trailing only Tesla.
Variety has certainly played a role, but policy has been the real tailwind. Like much of the industry, GM has benefited from the $7,500 federal clean vehicle credit—now redeemable at the point of sale—which has helped make its EVs more accessible.
President Trump has threatened to repeal this credit and pledged to move forward with the 25% tariffs on imports from Mexico. That’s a direct hit to GM, as two of its best-selling EVs—the Chevy Equinox EV and Blazer EV—are made south of the border. With the repeal of the tax credit and the addition of the tariffs, prices of these EVs could spike, squeezing GM’s margins and scaring new buyers away.
Here’s more on that from Reuters this morning:
Losing the $7,500 incentive could tank EV sales unless automakers cut prices, said Ivan Drury, director of insights for automotive research firm Edmunds.
“We know what happens if you don’t provide it,” he said of EV subsidies and discounts. “You don’t sell.”
GM said it had not decided whether to lower prices if the subsidies end and that it would wait to assess consumer and competitor reactions. GM nonetheless takes a “very long-term view” of its EV commitment, said spokesman Jim Cain.
The news wire even termed GM’s EV commitment as “stubborn,” which is a rare description these days. If GM can weather this storm—and it has the tools to do so—I think it can emerge as a bigger player in the EV market, and who knows, maybe even take Tesla’s crown down the line.
There are several reasons why that can happen. GM is now “variable profit positive” on its EV business as CEO Mary Barra said during the company’s Q4 2024 earnings call earlier this year. In simple terms, it’s making more money on EVs than the fixed costs involved, like labor and materials. That doesn’t account for other costs such as building new assembly lines, but it’s still a big step in the right direction.
Plus, lithium prices are falling. Ten new battery plants are coming online in 2025 in the U.S., which could make batteries cheaper. That could soften the financial blow of tariffs and potentially lost incentives. And let’s not forget that the beloved Chevy Bolt EV will return this year in an all-new avatar, riding on the Ultium platform. It could be a volume seller, and GM has promised it will be its most affordable EV.
It still has a safety net because its highly profitable gas truck and SUV business isn’t going anywhere anytime soon. In fact, that’s only growing. Still, the uncertainty is like a wrecking ball. We’ll see whether GM’s EV ambitions keep growing or hit a wall.
60%: Tesla To Compete With Waymo, Uber In California
Photo by: Out Of Spec Renew
Tesla CEO Elon Musk said during the automaker’s Q4 2024 earnings call that the brand will finally launch its robotaxi ride-hailing service in Austin starting in June this year. Last year, he had also promised that it would begin operating robotaxis in California, too. And now the first signs of truly self-driving Teslas operating in the Golden State are finally emerging.
Bloomberg reported that Tesla has applied for a “transportation charter-party carrier” permit with the California Public Utilities Commission. That’s a step toward owning and operating its own robotaxis. This is part of Musk’s big gamble on robotaxis as its passenger vehicle sales continue to decline. Someday it could be worth trillions of dollars, the CEO has claimed.
For now, though, these robotaxis won’t be fully autonomous. The outlet reports that Tesla will start with human drivers in the cars, at least initially. Waymo began testing with human drivers years ago before rolling out true driverless services in Phoenix and San Francisco. Waymo is now clocking 200,000 paid rides in the U.S. every week, before Tesla has even entered the arena.
There are lots of ifs and buts attached to Tesla’s robotaxi approach. And don’t forget that Teslas using the Full-Self Driving (FSD) system—which will also underpin the robotaxis—are still crashing.
90%: Why EV Tax Credits May Be Denied For Some Buyers
Photo by: InsideEVs
Last year, the U.S. government made obtaining tax credits for EVs substantially easier. Instead of waiting until the tax season to file your returns and then redeeming the credit, the new system allows buyers to obtain the tax credits at the point of sale, reducing the upfront cost for qualifying EVs. To make that happen, the IRS set up a system.
It created an online portal where car dealers can enroll to get reimbursed by the IRS for offering rebates to customers and also to report sales. As NPR reports, some 14,000 dealers enrolled in the system and about 3,000 did not. And apparently, some dealers mistakenly believed that the old system was still in place where customers would get their tax credit later during the filing season.
It’s unclear how many buyers are affected by this. But it sounds like the new guidelines were not swiftly incorporated by some dealers. Now, several affected EV buyers are reportedly having to appeal the tax credit rejection and write letters of explanation to the IRS.
But the broader point-of-sale system seems to be a success, with more than 300,000 purchases properly reported to the IRS with billions in savings for EV buyers.
100%: Will Automakers Weather This Economic Storm?
Photo by: Ford
My colleague Kevin Williams wrote in great detail yesterday about how the Trump administration’s tariffs, sweeping budget cuts, and widespread layoffs are taking a toll on everyone in America, including the auto industry.
The Silicon Valley mantra of “move fast and break things” seems to be doing more harm than good. Applying that philosophy, without any guardrails, to the largest economy in the world has already shaken consumer confidence and cast doubt on where things are headed.
Which automakers can withstand this stress test? Drop your thoughts in the comments.
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