General Motors EV Sales Surge 111% as Trump-Backed Tax Credit Expires

General Motors Co. reported a 111% year-over-year increase in electric vehicle (EV) sales during the second quarter, driven by a surge in industry-wide demand to meet the Trump administration’s expiration of clean vehicle tax credits on September 30. The automaker’s EV sales growth helped lift Q2 adjusted earnings before interest and taxes to $3.04 billion, exceeding StreetAccount estimates of $2.89 billion despite a 31.6% decline from the prior year’s $4.43 billion [1]. Chevrolet secured the No. 2 position in the U.S. EV market, trailing Tesla Inc., as automakers intensified efforts to clear inventory before the tax credit deadline.

The Inflation Reduction Act of 2022 had initially extended tax credits of up to $7,500 for new EVs and $4,000 for used models through 2032. However, the Trump-backed One Big Beautiful Bill Act nullified these incentives, creating urgency for buyers and sellers to act before the September 30 cutoff. Industry experts highlighted that dealerships nationwide adopted aggressive promotions to accelerate sales. For example, a California dealership offered a $99/month lease on Volkswagen’s 2025 ID.4 with a $5,000 cashback bonus, while a Michigan dealership provided a Chevrolet 2025 Equinox EV LT lease starting at $101/month [1].

General Motors CEO Mary Barra attributed the sales growth to the company’s “very strategic EV portfolio,” including luxury EVs from Cadillac. However, analysts noted that the surge was partially driven by inventory-clearing efforts rather than sustained consumer demand. Barra acknowledged that EV incentives as a percentage of average transaction prices were “more than two percentage points below the industry average,” reflecting competitive pressure to offload vehicles [1]. Despite capturing 16% of the U.S. EV market in Q2—compared to Tesla’s estimated 45.2%—GM’s EV business remains unprofitable in a traditional sense. In a January shareholder letter, Barra described the segment as “variable profit positive,” meaning revenue exceeded fixed manufacturing costs but not necessarily overall profits [1].

The company anticipates a post-deadline “pull ahead” effect, where buyers will delay purchases until 2026 to assess genuine demand. Barra also highlighted plans to reduce costs and improve profitability through “groundbreaking” battery technology by 2028, aiming to boost margins on large EVs and trucks. While the immediate sales boost aligns with short-term tax credit dynamics, the long-term viability of GM’s EV strategy will depend on its ability to cut costs and differentiate its offerings in a competitive market.

Source: [1] https://fortune.com/2025/07/23/general-motors-ev-sales-trump-clean-vehicle-tax-credit-deadline/

[2] https://www.fxtrustscore.com/market-news/