FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. Picture taken March 16, 2021. REUTERS/Rebecca Cook/File Photo

By David Shepardson and Nora Eckert

DETROIT (Reuters) -General Motors said on Wednesday it will cut U.S. electric vehicle and battery production and 1,200 factory jobs at its EV plant in Detroit along with 550 jobs at an Ohio battery plant as the automaker responds to a significant slowdown in demand for its battery cars.

The Detroit automaker said it will halt battery cell production at its two U.S. joint-venture battery plants - in Tennessee and Ohio - in January for about six months. It added it will also temporarily lay off about 1,550 workers at the battery factories.

In addition, at the Ohio plant, GM said it will lay off 550 workers indefinitely. GM operates the Ohio plant jointly with South Korea's LG Energy Solution.

GM said it will cut production at its Detroit EV plant to just one shift starting in January, compared with the two shifts at present after earlier layoffs at the plant. This will cut output by about 50%, it said. The plant produces three large electric pickup trucks, including the Chevrolet Silverado and GMC Sierra, as well as the EV Escalade IQ and Hummer SUV.

SLOWER EV ADOPTION

GM said the cuts were "in response to slower near-term EV adoption and an evolving regulatory environment." GM lobbied Congress and the White House to ease emissions requirements and last month also cut its EV production.

Automakers in the U.S. are backpedaling hard on their EV plans, anticipating a sharp drop in consumer demand following the expiration of a $7,500 federal tax credit for EV buyers. Some executives and analysts have said EV sales – which exceeded 10% of overall U.S. car sales over the summer – could fall by half in coming months.

Nissan, Jeep-maker Stellantis and other automakers have canceled plans for future electric models. Earlier this month, GM said it was canceling production of its electric BrightDrop van, citing slow development in the commercial EV van market.

Sam Fiorani, vice president at research firm AutoForecast Solutions, said he expected more U.S. auto industry EV job cuts to follow and "lower EV production than we’ve seen over the last few years and higher prices."

GM has been paring its outlook for EV sales and made other EV production cuts this year.

United Auto Workers union President Shawn Fain blasted GM for the job cuts, noting the company raised expected annual profits to $13 billion this month. "The UAW will continue to fight for more investment in both (internal combustion engine) and EV production at GM and beyond," Fain said.

In a separate restructuring move, GM cut about 500 white-collar jobs in the last week, the company said.

In 2021, GM said it planned to transition to all EV sales by 2035 and boosted spending, but has since been retrenching.

GM CEO Mary Barra said last week "with an evolving regulatory framework and the end of the federal consumer incentives, it's clear that near-term EV adoption will be much lower than planned."

She added that GM expected to reduce EV losses in 2026 and beyond.

The company took a $1.6 billion charge earlier this month related to changes in its EV strategy.

GM shares closed down 1% at $69.19 at midday on Wednesday. The shares have gained more than 35% so far this year.

(Reporting by David Shepardson in Detroit, Nora Eckert in Detroit and Utkarsh Shetti in Bengaluru. Editing by Matthew Lewis, Mark Potter and Aurora Ellis)