Electric Vehicle Market Resilience and SaaS Monetization: A Comparative Analysis of General Motors and Ford

The U.S. electric vehicle (EV) market in 2025 has been marked by turbulence, with shifting regulatory priorities, waning consumer demand, and fierce competition from Chinese automakers. Yet, within this challenging landscape, General Motors (GM) and Ford have adopted divergent strategies to navigate the transition to electrification and software-driven monetization. This analysis examines their competitive positioning, focusing on EV sales performance, strategic pivots, and the emerging role of software-as-a-service (SaaS) models in shaping long-term profitability.

EV Sales and Strategic Adjustments

In 2024, GM reported a 4% increase in U.S. sales, reaching 2.7 million vehicles, with EV sales surging 125% year-over-year. By the end of 2024, GM had achieved a critical milestone: positive variable profit on EVs, signaling progress toward profitability. This success was driven by a diversified portfolio, including the Chevrolet Equinox EV (the best-selling non-Tesla EV in the U.S.) and luxury models like the Cadillac LYRIQ according to industry reports. In contrast, Ford faced a $19.5 billion writedown on EV-related assets in late 2025, reflecting canceled programs such as the F-150 Lightning's fully electric variant and reduced capital spending on EVs. Ford's EV sales fell 31.4% in Q2 2025, exacerbated by inventory shortages and recalls.

Both automakers have increasingly leaned on gasoline-powered trucks and SUVs, which remain highly profitable. GM's CEO, Mary Barra, emphasized that demand for Chevrolet and GMC pickups and SUVs was a key growth driver in 2025. Ford, meanwhile, has shifted focus to hybrids and extended-range electric vehicles (EREVs), with plans for 50% of global sales to be electrified by 2030. This strategic recalibration underscores the sector's broader reality: profitability in the near term hinges on balancing EV investments with the enduring appeal of traditional powertrains.

SaaS Monetization: Software-Defined Vehicles and Recurring Revenue

The shift to software-defined vehicles (SDVs) has emerged as a critical battleground for automakers. GM has taken a bold approach, generating nearly $2 billion in 2025 from software services like OnStar and Super Cruise, with deferred revenues reaching $5 billion. Its Super Cruise active subscriber base nearly doubled to 500,000 by Q3 2025, with plans to expand to 600,000 by year-end. GM's next-generation SDV platform, supported by partnerships with NVIDIA, aims to deliver continuous over-the-air (OTA) updates and monetize evolving features through subscription models. Analysts project that Super Cruise and Ultra Cruise could generate over $2 billion in annual recurring revenue within five years.

Ford, by contrast, has adopted a more measured strategy. After pausing its ambitious FNV4 "fully networked vehicle" initiative due to cost overruns, the company now prioritizes incremental OTA updates and connected services. Its BlueCruise hands-free driving system, for example, saw price adjustments in October 2024 to improve accessibility. Ford's FNV3.X software architecture spans both ICE and EVs, ensuring a consistent digital experience across its fleet. While this approach reduces short-term costs, it lags behind GM's aggressive investment in AI-powered SDV platforms and partnerships with tech firms according to industry analysis.

Market Dynamics and Long-Term Outlook

The U.S. EV market's share of retail sales declined to 6.6% in December 2025, down from 11.2% the prior year, partly due to the removal of the $7,500 EV tax credit and regulatory shifts under the Trump administration. Both GM and Ford face headwinds from slowing demand, rising production costs, and competition from Chinese automakers, which are rapidly scaling software-led revenue models. However, their responses highlight divergent philosophies: GM's disciplined scaling of EV production and software monetization versus Ford's pivot to hybrids and cost-efficient electrification.

For investors, the key differentiator lies in execution. GM's ability to achieve positive variable profit on EVs and its robust SaaS ecosystem positions it as a leader in the software-defined vehicle era. Ford's focus on hybrids and EREVs may stabilize short-term cash flows but risks ceding ground in the long-term software-driven value chain. As Capstone Partners notes, the SDV market is projected to exceed $1 trillion by 2035, with recurring revenue from features and services becoming a cornerstone of profitability.

Conclusion

The EV transition has exposed stark contrasts in GM and Ford's strategies. While both have scaled back EV ambitions in response to market realities, GM's disciplined approach to software monetization and diversified EV portfolio offers a clearer path to long-term resilience. Ford's reliance on hybrids and cost-cutting measures may preserve near-term profitability but could leave it vulnerable to the accelerating software-driven disruption reshaping the industry. For investors, the lesson is clear: in an era where software defines value, strategic agility and recurring revenue models will separate winners from laggards.