General Motors CEO Mary Barra speaks during a news conference in Lansing, Mich., Jan. 25.

Photo: Paul Sancya/Associated Press

General Motors CEO Mary Barra has apparently learned from rival Elon Musk of Tesla that the first key to succeeding in the electric-vehicle business is greasing the political system for government handouts.

She appeared at a White House event last Thursday to promote the Inflation Reduction Act, Senate Democrats’ tax-and-spending bill, even as the Business Roundtable, the big-business outfit that she chairs, lobbied furiously against it. Was this a betrayal of the roundtable’s members?

The roundtable’s leaders elected Ms. Barra last September to help them navigate the progressive climate in Washington, as she’d proved adept at doing. After the 2020 election, she took a U-turn and went from backing the Trump administration’s legal fight against California over its electric-vehicle mandate to promoting Joe Biden’s EV agenda.

Shortly after Mr. Biden’s inauguration, GM announced that it would stop selling gasoline-powered cars by 2035. After other auto makers followed with similar pledges, Mr. Biden praised Ms. Barra for having “electrified the entire automobile industry.”

Last August Ms. Barra and executives from Ford and Stellantis (which owns Chrysler) stood with Mr. Biden as he announced tougher vehicle greenhouse-gas emissions standards. They issued a full-throated endorsement with one costly caveat: To achieve the standards, the auto makers required a “full suite” of government subsidies, including “purchase incentives, a comprehensive charging network of sufficient density to support the millions of vehicles these targets represent, investments in R&D, and incentives to expand the electric vehicle manufacturing and supply chains in the United States.”

House Democrats a month later introduced their Build Back Better bill with a truckload of subsidies. The most significant was a $12,500 tax credit for union-made electric cars. That would have excluded foreign manufacturers and Tesla, whose employees don’t belong to the United Auto Workers. Mr. Musk seethed: “Biden held this EV summit. Didn’t invite Tesla. Invited GM, Ford, Chrysler, and UAW. EV summit at the White House, didn’t mention Tesla once and praised GM and Ford for leading the EV revolution. Doesn’t it sound a little bias? It’s not the friendliest of administrations. Seems to be controlled by the unions.”

Meantime, Tesla lobbied the Environmental Protection Agency behind the scenes to make its proposed emissions standards tougher for traditional auto makers, thereby forcing them to buy more regulatory credits from Tesla to comply. Tesla has rung up huge profits from these credit sales—until last year, more than it made from selling cars.

Mr. Musk appeared to triumph in December, when West Virginia Sen. Joe Manchin killed the House version of Build Back Better. Soon after, the EPA issued significantly tougher emissions rules that would effectively require that electric cars make up 17% of a company’s sales in 2026, up from about 3% last year. EVs have accounted for only about 1% of GM’s U.S. sales this year.

Without Build Back Better’s full suite of subsidies, traditional auto makers almost certainly wouldn’t be able to meet the EPA’s stricter standards. That means they would have to buy more credits from Tesla.

For one thing, scaling up production requires enormous amounts of capital. Tesla relied in its early years on government support, including $1.3 billion from Nevada for a battery “gigafactory” and a $465 million federal loan in 2010. Its credit sales also provided billions in free capital. Now after more than a decade of bleeding money, Tesla is turning a profit.

Tesla hit the 200,000 manufacturer cap for the existing $7,500 EV tax credit in 2018. GM did several months later. But while Tesla sales have continued to grow thanks to its brand cachet and affluent customer base, GM is struggling. Tesla has sold about 390,000 electric vehicles in the U.S. this year—about 27 times as many as GM.

Also costing GM is a massive recall of the Chevy Bolt because of manufacturing defects in its LG Energy batteries, which can cause them to catch fire spontaneously. GM last month offered recent Bolt buyers a $6,000 refund if they promise not to sue over battery defects.

Yet in the nick of time, the Biden administration and Democrats in Congress are riding to GM’s rescue. Two days before Mr. Manchin announced his deal with Majority Leader

Chuck Schumer, the Energy Department awarded a $2.5 billion low-interest federal loan to GM’s battery joint venture with LG Energy.

The bill includes all the subsidies for which Detroit auto makers had lobbied, including $20 billion in loans and up to $10 billion in tax credits to build EV factories. It would also remove the 200,000 manufacturer cap for the $7,500 tax credit while imposing new price restrictions that would hurt startup Rivian, the Detroit auto makers’ top competitor in electric trucks. While the tax credit comes with conditions for material sourcing that no auto maker could currently meet, the administration may waive these.

“Thank you for the opportunity to voice our support for the Inflation Reduction Act,” Ms. Barra said at the White House event last week. The Business Roundtable over the weekend issued a statement opposing the bill. Ms. Barra may discover that businesses that live by government handouts can die by them too.