GM boosts EV sales but it’s keeping most of its money in gas-powered cars anyway
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In the first quarter of 2025, GM’s EV sales jumped 94% compared to the same period last year, according to Investor’s Business Daily. That kind of growth would suggest a company all-in on electrification. But GM is doing something different. According to a recent Barron’s report, the company is still allocating 55% of its capital and R&D spending to conventional ICE vehicles. The other 45% is going to EV development.
It’s a careful play. And it says a lot about GM’s long-term view of the U.S. market.
While EV demand is growing, it’s still not as strong nationwide as headlines might suggest
EVs made up about 6% of total vehicle sales in the U.S. in early 2025. Compare that to California, where EVs claim roughly 20% of the market. GM appears to be tailoring its investments to meet consumers where they actually are, not where projections say they’ll be.
At the same time, the company is staying competitive in the traditional gas-powered space
In late May, GM announced it would invest $888 million into its Tonawanda, New York, plant to build sixth-generation small-block V8 engines. The decision to double down on internal combustion came shortly after GM canceled plans for a new EV motor plant in the state.
CEO Mary Barra told The New York Post she supports the proposed 25% auto import tariffs. She views them as a way to help level the playing field for U.S. automakers. But tariffs or not, GM is still facing about $5 billion in added costs this year alone as a result of global trade pressures.
Not only that, but consumer sentiment around the automaker’s L87 6.2L V8 engine has some folks asking GM to do better
The NHTSA recently opened an investigation into more than 800,000 GM vehicles with L87 units, citing sudden engine failure. The company recalled more than 600,000. Owners keep experiencing loss of engine function stemming from main bearing or crankshaft component failure. Symptoms arise as early as just 1,000 miles. In certain cases, the failure happened at high speeds, like freeway driving.
Still, GM is delivering strong numbers
The company sold over 693,000 vehicles in Q1, its best start to a year since 2018. The Silverado pickup and compact Trax SUV saw very strong sales.
The Lyriq, Cadillac’s electric SUV, achieved record sales of 5,800 units in Q1 2025, marking a 499% increase year-over-year. This made it Cadillac’s third-highest-selling nameplate for the quarter.
Of course, 5,800 doesn’t touch the more popular models. The current year model Silverado went to 128,926 new homes in Q1.
The company is also leading among legacy automakers in stock performance. According to Barron’s, GM has outpaced Ford and Stellantis in total returns over the last five years, thanks in part to stable margins and aggressive share buybacks.
GM isn’t betting the house on EVs yet. It’s hedging. And with both gas and electric models finding buyers, that strategy may be the most grounded move in today’s unpredictable market.
