U.S. EV factories face layoffs and investment slowdown as policies shift
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A worker checking many industrial batteries inside a facility. Indoor, industrial setting. File photo. |
LORDSTOWN, Ohio — September 16, 2026
The U.S. electric vehicle industry is facing a sharp reversal after years of heavy investment in factories and battery plants. Changes in federal policy under President Donald Trump, combined with weaker-than-expected EV demand, have led automakers to cancel, delay or reshape projects that had promised thousands of manufacturing jobs.
In Lordstown, Ohio, the shift is visible at the $2.3 billion Ultium Cells battery plant, built by General Motors and South Korea's LG Energy Solution. The facility opened in 2022 with about 1,300 workers, but weak EV demand led to major layoffs and a temporary halt in battery production.
About 480 workers were placed on indefinite layoff, while hundreds of others were told they would not be needed for months. The company later brought about 700 workers back and restarted battery-cell production in August, but roughly 600 remained on indefinite layoff.
The changes came after Congress ended the federal $7,500 consumer tax credit for new electric vehicles in 2025. EV sales had already been growing more slowly than many automakers expected, but executives have said the loss of the incentive further weakened demand and affected investment decisions.
The Lordstown plant was part of a much larger manufacturing expansion. From 2019 through 2024, U.S. auto-manufacturing investment more than doubled compared with the previous six-year period, with EV-related projects accounting for the increase. The expansion was intended to strengthen domestic battery production and reduce dependence on supply chains dominated by China.
The investment was concentrated in states across the Midwest and South, creating what became known as the "Battery Belt." Data from Atlas Public Policy show that companies have since canceled or delayed a significant number of projects, with canceled projects between January 2025 and August 2026 representing about 27,000 announced jobs. The figure does not include projects that were reduced in size or investments where expected employment was not disclosed.
The slowdown did not begin entirely with Trump's return to office. Consumers had been buying fewer EVs than automakers had anticipated, with vehicle prices, charging availability and concerns about driving range affecting demand. Atlas Public Policy has also reported cancellations and delays linked to changing market conditions alongside federal policy changes.
Still, several automakers have directly linked changes in government policy to decisions about their EV programs. The Trump administration has reduced regulatory pressure on automakers to move toward lower-emission vehicles and has promoted gasoline-powered vehicles as part of its broader energy policy.
The administration has also imposed tariffs affecting imported materials and components used in battery manufacturing. The industry has faced additional difficulties from tighter immigration enforcement, which has affected the ability of some foreign manufacturers to bring specialized engineers and technicians to U.S. factories.
In September 2025, federal immigration agents arrested hundreds of people during a raid at an under-construction Hyundai and LG Energy Solution battery facility in Georgia. The incident disrupted the movement of South Korean engineers and other specialists who were needed to help install and calibrate specialized equipment.
The effect has been particularly visible in communities that expected EV factories to transform local economies. Lordstown had already lost its General Motors vehicle assembly plant in 2019 after more than five decades of production. The new battery factory was supposed to replace some of those lost jobs and support a wider industrial revival.
A similar story unfolded in Glendale, Kentucky, where Ford and SK On had planned a $5.8 billion battery complex expected to employ about 5,000 people. The companies later reduced their plans, and about 1,500 workers were laid off in December 2025.
Ford now plans to use part of the Glendale facility for energy-storage batteries rather than relying entirely on EV demand. The company expects to employ about 2,100 workers there when production begins, less than half the original employment target.
Other automakers are also changing course. Ford has shifted plans for a Tennessee factory from electric pickups toward gasoline-powered trucks, while Stellantis has canceled or delayed some EV programs and is placing greater emphasis on gasoline-powered vehicles.
The change has created opportunities for factories designed around conventional engines and trucks, particularly because large gasoline-powered pickups remain highly profitable for U.S. automakers. But the transition does not necessarily replace the jobs and investment originally expected from EV manufacturing.
Some battery factories may also be converted to produce batteries for electricity storage. Demand for those systems is growing as data centers and artificial intelligence infrastructure require more electricity. However, converting an EV battery facility to another type of battery production can take time and may not generate enough demand to use the full capacity of plants built for electric vehicles.
The United States is also facing stronger competition from China and Europe. Both regions continue to expand electric vehicle production, supported by consumer demand, competition among automakers and government policies. A slower U.S. transition could leave American manufacturers with a smaller role in a global market that is increasingly moving toward electric vehicles.
For workers in places such as Lordstown and Glendale, the industrial transition remains uncertain. Some factories are restarting or changing their products, while other projects have been canceled or scaled back.
The result is not simply a collapse of U.S. auto manufacturing, but a major change in the direction of investment. A factory expansion once centered on EVs and batteries is increasingly being divided among gasoline vehicles, hybrids, electric vehicles and energy-storage technology, as automakers respond to changing consumer demand and government policy.
