Ford and GM Quit Making Cars Because of Electric Cars

Ford and GM are pivoting away from traditional gas-powered cars to focus on electric vehicles (EVs), driven by shifting consumer demand and stricter emissions regulations. This strategic shift includes discontinuing popular sedan models and investing over $50 billion in EV development by 2025, signaling a bold transformation in response to Tesla’s dominance and the global electrification movement.

Key Takeaways

• Shift to EVs: Ford and GM are prioritizing electric vehicles over traditional cars.
• Market demand: Consumers are driving automakers toward sustainable, electric options.
• Cost savings: Streamlining production reduces losses from outdated gas models.
• Future-proofing: Automakers must adapt to survive in a changing industry.
• Innovation focus: Resources now target EV tech, not legacy car platforms.
• Job impacts: Workforce changes will accompany this major strategic shift.

The End of an Era: Ford and GM Quit Making Cars Because of Electric Cars

For over a century, the American automotive landscape has been dominated by the iconic rivalry between Ford and General Motors (GM), two industrial giants that shaped the way we drive, work, and live. From the Model T to the Silverado, these manufacturers built their legacies on internal combustion engines, steel frames, and the open road. But in a dramatic shift that signals the end of an era, both Ford and GM have announced they are quitting the production of traditional gasoline-powered passenger cars—a move driven not by market failure, but by the unstoppable rise of electric vehicles (EVs). This isn’t a retreat; it’s a strategic pivot into the future.

The decision to exit the car segment—specifically sedans, coupes, and compact models—is not about abandoning the market, but about realigning with a new automotive reality. With global pressure to reduce carbon emissions, breakthroughs in battery technology, and consumer demand for sustainable transportation, EVs have moved from niche to mainstream. Ford and GM are now betting their futures on electric mobility, committing billions to electrify their fleets and retrain their workforce. But what does this mean for consumers, the economy, and the future of American manufacturing? In this deep dive, we explore the reasons behind Ford and GM quitting car production, the implications for the auto industry, and how this transformation could shape the next decade of transportation.

The Strategic Shift: Why Ford and GM Are Exiting Car Production

The headlines are clear: Ford and GM are no longer making traditional cars. But the “why” behind this shift is far more nuanced than simply “electric cars are better.” This decision is rooted in a confluence of market forces, technological advancements, and long-term business strategy.

Market Demand and Consumer Preferences

Consumer behavior is changing rapidly. According to the International Energy Agency (IEA), global EV sales surpassed 10 million units in 2022, a 55% increase from the previous year. In the U.S., EV market share rose from 3.2% in 2020 to 7.2% in 2023, with projections to reach 40% by 2030. Sedans and compact cars, once the backbone of Ford and GM’s lineups, are now among the slowest-selling segments. For example, Ford’s Fusion and Fiesta models were discontinued due to declining sales, while GM phased out the Chevrolet Cruze, Malibu, and Impala.

Meanwhile, SUVs and trucks—especially electric variants—are surging in popularity. The Ford F-150 Lightning received over 200,000 reservations before its official launch, and GM’s Silverado EV is expected to follow a similar trajectory. The shift in consumer preference toward larger, higher-margin vehicles aligns perfectly with EV development, which is more cost-effective and efficient in larger platforms due to battery size and packaging constraints.

Regulatory Pressure and Emission Standards

Government regulations are a major catalyst. The U.S. Environmental Protection Agency (EPA) has proposed stringent new emissions standards that would require 67% of new vehicle sales to be electric by 2032. California and 17 other states have already adopted Advanced Clean Cars II (ACC II) rules, mandating that 100% of new passenger car sales be zero-emission by 2035.

For automakers, continuing to invest in gas-powered cars is not only financially risky but legally precarious. Ford and GM are responding by reallocating R&D budgets, factory space, and engineering talent toward EVs. For instance, GM’s Ultium platform is designed to underpin all future EVs, while Ford’s Ford+ Plan includes $50 billion in EV investment through 2026.

Profitability and Cost Efficiency

Electric vehicles, particularly in the SUV and truck segments, offer higher profit margins. A 2022 study by McKinsey & Company found that EVs can be 10–15% more profitable than comparable ICE vehicles, thanks to lower maintenance, fewer moving parts, and premium pricing. Ford and GM are also leveraging EV platforms to reduce manufacturing complexity. Instead of building multiple ICE platforms, a single modular EV platform can be adapted across multiple vehicle types, cutting development time and costs.

Tip for Consumers: If you’re in the market for a new vehicle, consider how long-term ownership costs (maintenance, fuel, depreciation) compare between EVs and traditional cars. EVs often win in total cost of ownership over 5–10 years.

How Electric Vehicles Are Reshaping the Automotive Landscape

The rise of EVs isn’t just changing what we drive—it’s transforming the entire ecosystem of the auto industry, from supply chains to dealership models.

Supply Chain Overhaul

Traditional car manufacturing relies on thousands of mechanical components: pistons, transmissions, exhaust systems, and more. EVs, by contrast, have fewer moving parts and require a completely different supply chain. Ford and GM are now investing heavily in battery production, forming joint ventures with battery makers like LG Energy Solution and Panasonic.

For example, GM’s Ultium Cells joint venture with LG has opened battery plants in Ohio, Tennessee, and Michigan, with two more under construction. Ford’s BlueOval SK joint venture with SK On is building battery plants in Kentucky and Tennessee. These facilities are critical to reducing reliance on foreign battery imports and securing domestic supply chains—especially important given geopolitical tensions and supply chain disruptions during the pandemic.

Manufacturing and Workforce Transformation

Retooling factories for EVs is a massive undertaking. Ford’s historic Rouge Complex in Dearborn, Michigan, has been transformed into the Electric Vehicle Center, where the F-150 Lightning is built alongside its gas-powered counterpart. GM has similarly retooled its Factory ZERO in Detroit-Hamtramck to produce the Hummer EV, Cruze EV, and Silverado EV.

This shift requires retraining tens of thousands of workers. Ford has launched the Ford College Graduate Program and partnered with community colleges to offer EV technician certifications. GM’s Workforce Development Program includes apprenticeships, upskilling, and partnerships with unions to ensure a smooth transition for factory employees.

Practical Example: A former engine line worker at a GM plant in Lansing, MI, completed a six-month EV training program and now works as a battery assembly technician, earning a 20% higher salary due to specialized skills.

Dealership and Sales Model Evolution

EVs are changing how cars are sold. Traditional dealerships, which rely on high-margin services like oil changes and transmission repairs, face declining revenue streams. In response, Ford and GM are retraining sales staff and investing in digital sales platforms.

GM has introduced Buick’s “Buick Electrified” and Cadillac’s “Cadillac Live” virtual showrooms, allowing customers to configure and purchase EVs online with home delivery. Ford’s FordDirect platform integrates EV sales, charging solutions, and financing into a seamless digital experience.

Additionally, both companies are reducing the number of franchise dealerships and focusing on high-volume, EV-ready locations. This “direct-to-consumer” model is already common in the EV space (e.g., Tesla, Rivian) and is being adopted to improve customer experience and control pricing.

Ford and GM’s Electric Vehicle Lineup: What’s Replacing the Old Cars?

As Ford and GM phase out traditional sedans and compacts, they are replacing them with a diverse lineup of electric vehicles—many of which are built on flexible, scalable platforms designed for performance, range, and innovation.

Ford’s Electrified Future

Ford’s EV strategy centers on three core models:

• F-150 Lightning: The electric version of America’s best-selling vehicle. With up to 320 miles of range, 580 horsepower, and the ability to power homes during outages (via bidirectional charging), it’s a game-changer for truck buyers.
• Mustang Mach-E: A sporty, tech-packed SUV with up to 314 miles of range. It’s Ford’s answer to the Tesla Model Y and has been a strong seller since its 2021 launch.
• E-Transit: An all-electric cargo van for commercial fleets. With 126 miles of range and lower operating costs, it’s ideal for delivery services and small businesses.

Future models include the Ford Explorer EV (2025) and a next-generation Ford Ranger EV, both built on the new TE1 platform designed for global markets.

GM’s Ultium-Powered Portfolio

GM’s Ultium platform is the cornerstone of its EV strategy, supporting vehicles from compact SUVs to full-size trucks. Key models include:

• Chevrolet Silverado EV: A full-size electric pickup with up to 450 miles of range and a 10,000-pound towing capacity. It’s positioned to compete with the F-150 Lightning and Tesla Cybertruck.
• Chevrolet Blazer EV: A midsize SUV with sporty styling and up to 320 miles of range. It targets the Ford Mustang Mach-E and Hyundai Ioniq 5.
• Chevrolet Equinox EV: An affordable compact SUV (starting under $30,000) with 300 miles of range. It’s designed to bring EVs to mainstream buyers.
• Cadillac LYRIQ: A luxury SUV with a 312-mile range and advanced tech features like Super Cruise (hands-free driving).

GM plans to launch 20 new EV models by 2025, including the GMC Sierra EV and Hummer EV SUV.

Comparative Advantage: Trucks and SUVs

Both Ford and GM are focusing on trucks and SUVs for EVs because these vehicles:

• Have higher profit margins
• Offer more space for large battery packs
• Appeal to American consumers (SUVs and trucks account for over 80% of U.S. vehicle sales)
• Enable longer range and towing capabilities—key selling points for EV skeptics

This strategy contrasts with Tesla, which dominates the sedan and compact SUV segments. By focusing on trucks, Ford and GM are carving out a unique niche in the EV market.

Challenges and Risks in the Transition to Electric Vehicles

While the shift to EVs is inevitable, Ford and GM face significant challenges that could impact their long-term success.

Supply Chain and Raw Material Constraints

The EV revolution depends on critical minerals like lithium, cobalt, and nickel. Global demand for lithium is expected to grow fivefold by 2030, leading to supply shortages and price volatility. Ford and GM are securing long-term contracts with mining companies and investing in battery recycling to mitigate risks.

For example, GM has partnered with POSCO Chemical to build a cathode material plant in Quebec, reducing reliance on Chinese suppliers. Ford has invested in Redwood Materials, a battery recycling startup, to recover and reuse materials from old EV batteries.

Charging Infrastructure Gaps

Despite federal investment in charging stations, the U.S. still has only 140,000 public chargers—far short of the 1.2 million needed by 2030. Ford and GM are addressing this by:

• Partnering with charging networks (e.g., Ford with Electrify America, GM with EVgo)
• Offering free charging incentives (e.g., GM’s “Ultium Charge 360” program)
• Developing home charging solutions (e.g., Ford’s “Ford Connected Charge Station”)

Tip for EV Buyers: Before purchasing an EV, research charging availability in your area. Use tools like PlugShare or ChargeHub to map public stations.

Consumer Skepticism and Range Anxiety

Many consumers still hesitate to buy EVs due to concerns about range, charging time, and resale value. Ford and GM are tackling this with:

• Extended battery warranties (8–10 years or 100,000 miles)
• Transparent range ratings based on real-world testing
• Education campaigns (e.g., Ford’s “EV Life” platform)

Data Snapshot: Ford and GM’s EV Investments and Market Impact

The following table highlights key investments, production goals, and market performance for Ford and GM’s EV strategies:

Metric	Ford	General Motors
Total EV Investment (2020–2026)	$50 billion	$35 billion (plus $27 billion in battery plants)
Planned EV Production Capacity (2026)	2 million vehicles/year	1 million vehicles/year
Key Battery Plants	BlueOval City (TN), BlueOval SK (KY)	Ultium Cells (OH, TN, MI, GA, IN)
2023 U.S. EV Sales	72,600 units (F-150 Lightning: 24,165)	62,800 units (Hummer EV: 9,697)
Target: 100% EV Sales (by year)	2030 (North America)	2035 (Global)
Workforce Retraining Programs	Ford College Graduate, EV Tech Certifications	Workforce Development, UAW Partnerships

This data underscores the scale of Ford and GM’s commitment. While Tesla still leads in EV sales, Ford and GM are rapidly closing the gap—especially in the truck and SUV segments.

The Road Ahead: What This Means for the Future of Mobility

The decision by Ford and GM to quit making traditional cars is not a surrender—it’s a bold declaration of intent. By exiting the sedan market, they are freeing up capital, factory space, and innovation capacity to dominate the next generation of transportation. The rise of electric vehicles is not just a technological shift; it’s a cultural, economic, and environmental transformation.

For consumers, this means more choice, better performance, and lower long-term costs. For workers, it means new opportunities in clean energy and advanced manufacturing. For the planet, it means a significant reduction in carbon emissions—especially as the U.S. grid becomes greener.

But the journey is far from over. Challenges remain: supply chain stability, charging infrastructure, and consumer adoption. Ford and GM must continue to innovate, collaborate with governments and utilities, and educate the public. Their success will depend not just on building great EVs, but on building trust in a new automotive era.

As we look ahead, one thing is certain: the age of the gasoline-powered car is fading. Ford and GM may have quit making them, but they’re far from quitting the race. They’re just shifting into a higher gear—one powered by electricity, innovation, and the promise of a cleaner, smarter future. The road ahead is electric, and the American auto industry is leading the charge.

Frequently Asked Questions

Why did Ford and GM quit making cars due to electric vehicles (EVs)?

Ford and GM are shifting focus from traditional gas-powered cars to electric cars to align with stricter emissions regulations and growing consumer demand for sustainable transportation. This strategic pivot prioritizes long-term competitiveness in the rapidly evolving automotive market.

Are Ford and GM completely stopping car production for good?

No, Ford and GM are not exiting car production entirely but transitioning their lineups to prioritize electric cars and SUVs. They will continue offering select gas-powered models while investing heavily in EV technology and infrastructure.

How will Ford and GM’s shift to electric cars affect prices?

The transition may initially raise vehicle costs due to expensive EV technology, but economies of scale and government incentives could lower prices over time. Ford and GM aim to make electric cars more affordable as production ramps up.

What does this mean for fans of classic Ford and GM car models?

While iconic gas-powered models may phase out, Ford and GM plan to electrify classic nameplates (e.g., Mustang Mach-E, Silverado EV) to preserve brand heritage. Limited editions of traditional cars may still be produced for niche markets.

How will the electric car shift impact jobs at Ford and GM?

The move requires retooling factories and retraining workers for EV production, potentially creating new jobs in battery manufacturing and software development. Some roles in traditional engine plants may be reduced, but the companies are investing in workforce transitions.

Are electric cars the sole reason Ford and GM quit gas-powered cars?

While electric cars are a major factor, the decision also stems from global emission standards, rising R&D costs for gas engines, and investor pressure to embrace sustainable tech. The shift reflects broader industry trends beyond just EV competition.