When the President Gets It Wrong

Here's an awkward conversation: the President of the United States praises you for revolutionizing an entire industry, and you have to tell him he's crediting the wrong person. That's exactly what happened to General Motors Co. (GM) CEO Mary Barra during a 2021 White House event.

Speaking at the New York Times' DealBook Summit on Wednesday, Barra shared a revealing anecdote about her private exchange with then-President Joe Biden. When Biden credited her for the surge in America's domestic EV sector, she set the record straight. "Actually, I think a lot of that credit goes to Elon and Tesla," Barra told him, explaining that she doesn't believe in taking credit for things she didn't do.

The moment is particularly ironic given the context. The August 2021 White House event brought together executives from GM, Ford Motor Co. (F), and Stellantis NV (STLA) to celebrate electric vehicles. Conspicuously absent? Elon Musk and Tesla Inc. (TSLA), the company that actually pioneered the modern EV market. Even former Vice President Kamala Harris later admitted the snub was a "big mistake."

Reality Bites: GM's EV Struggles

Barra's comments about who really deserves EV credit come at an especially tough moment for GM. The automaker just announced it's laying off 3,400 workers, including 1,200 employees at its Detroit EV plant and over 550 at the Ohio Ultium Cell facility. That's not exactly the victory lap you'd expect from an EV leader.

The layoffs are part of a broader financial reckoning. GM took a $1.6 billion charge related to its EV operations, with more than $1.2 billion stemming from EV capacity changes and another $400 million from contract cancellations. When you're cutting capacity and canceling contracts, it's a pretty clear signal that your EV ambitions haven't matched reality.

The Regulatory Pendulum Swings

Meanwhile, the political winds around EVs are shifting. Ford CEO Jim Farley cheered President Donald Trump's decision to relax Corporate Average Fuel Economy standards on Wednesday, calling it a move that will boost affordability in the U.S. market.

The rollback earned praise from Republican lawmakers too. Sen. Ted Cruz of Texas applauded the change, arguing it would ensure better vehicle safety. Cruz has also challenged various safety features like automatic emergency braking, citing concerns about affordability. Transportation Secretary Sean Duffy joined the chorus of supporters as well.

The regulatory debate highlights the tension automakers face: they've invested billions in EVs partly because of government mandates and incentives, but consumer demand hasn't quite materialized as quickly as hoped. Now, with the rules loosening, the industry finds itself caught between its massive EV investments and a market that's moving slower than expected.

Price Action: GM shares climbed 1.40% to close at $74.69, then added another 0.28% in pre-market trading to reach $74.90.