GM's Regulatory Roulette: How the Senate Vote Could Make or Break EV Dominance in 2035

The U.S. Senate’s stalled vote on California’s 2035 gas car ban has automakers, investors, and regulators on edge. For General Motors (GM), once a vocal skeptic of aggressive EV mandates, the stakes couldn’t be higher. The outcome of this regulatory showdown will determine whether automakers must accelerate EV production now—or buy time to navigate consumer preferences, supply chain hurdles, and profit margins. For investors, this is no academic debate: it’s a call to bet on either the bold or the cautious in a sector where missteps could cost billions.

The Regulatory Tightrope: Why the Senate’s Inaction Is a Problem

The Congressional Review Act (CRA) offers Republicans a rare tool to overturn the EPA’s waiver for California’s EV mandate—but Senate Majority Leader John Thune’s reluctance to schedule a vote has left automakers in limbo. A “yes” vote to block the waiver would delay EV adoption timelines, allowing traditional automakers like GM to delay costly battery investments. A “no” vote (or procedural defeat) would lock in a 2035 ban, forcing companies to pivot faster to EVs.

The parliamentarian’s ruling that the waiver may not qualify for CRA reversal adds another layer of uncertainty. Even if Republicans push ahead, legal challenges could drag on for years. Automakers, however, must plan now.

GM’s Pivot: From Skeptic to Pragmatist

GM’s shift from opposing the 2035 ban to publicly endorsing it in 2024 signals a critical acknowledgment: consumer demand for EVs is outpacing expectations. The company’s Ultium platform, designed to dominate the mid-range EV market, now hinges on regulatory clarity.

But here’s the rub: GM’s profitability depends on scale. The 2035 mandate would force competitors to adopt its EV infrastructure, boosting GM’s market share. Conversely, a delayed mandate might let rivals catch up—but at the cost of long-term climate liability risks.

The numbers are stark: California’s market share of 15% of U.S. auto sales now sees nearly 10% EV adoption, versus 5% nationally. Automakers ignoring this trend risk losing the high-margin, early-adopter market.

Why Investors Should Care: The 2035 Vote’s Hidden Leverage

The Senate’s decision isn’t just about California—it’s about national policy alignment. If the waiver stands, 12 states representing 40% of the U.S. population will enforce the 2035 deadline, creating a de facto national standard. Automakers will have no choice but to invest billions in EV factories, batteries, and charging networks.

For investors, this creates two clear scenarios:

1. Scenario 1: Senate Kills the Waiver
2. Winners: Traditional automakers (GM, Ford) gain flexibility to phase out EVs gradually.
3. Losers: EV-focused firms (Tesla, Rivian) lose a key growth catalyst.

4. Risk: Long-term climate regulations could still force a 2040 ban, leaving automakers scrambling later.

5. Scenario 2: Waiver Survives

6. Winners: GM, which has already committed $35 billion to EVs by 2025.
7. Losers: Fossil fuel-dependent automakers and battery-material suppliers unprepared for scale.
8. Risk: Near-term profit hits as EV production costs outstrip demand in non-mandate states.

The Bottom Line: Act Now—But Be Strategic

The Senate’s delay is a gift to investors. Here’s how to position your portfolio:

• Buy GM on dips: Its EV pipeline and geographic diversification (e.g., Canada, China) offer resilience.
• Short EV hype stocks: Companies without cost-efficient battery tech (e.g., Nikola) face a reckoning if mandates are delayed.
• Hedge with battery miners: Lithium and cobalt stocks (e.g., Albemarle) will thrive if the mandate stands—and offer downside protection if it doesn’t.

Final Warning: The Clock Is Ticking

The Senate’s 60-day CRA window closed in early 2025, but procedural games could keep the issue alive. Investors must act before the vote—whenever it happens—to avoid getting whipsawed. This isn’t just about cars; it’s about who controls the $1.5 trillion U.S. auto market.

In a sector where a single regulatory vote can redefine winners and losers, there’s no room for bystanders. The Senate’s decision is a catalyst—position your portfolio to profit from it now.

The 2035 EV ban’s fate isn’t just about California—it’s about who will lead the automotive industry in 2035. The Senate’s vote could decide it all.