General Motors Suffers $6 Billion Blow as EV Plans Meet Market Realities
General Motors revealed on Thursday that it will register an estimated $6 billion in charges during the fourth quarter. This comes as the automotive behemoth scales down its previously aggressive electric vehicle (EV) expansion plans in the face of dwindling consumer demand.
The financial hit follows the September expiration of federal EV tax credits. These credits, worth up to $7,500 for new vehicles, led to a steep drop in electric car sales across the industry. The charges are primarily due to canceled supplier contracts, asset writedowns, and commercial settlements as GM restructures its EV strategy. This is in addition to a $1.6 billion charge the company incurred in the third quarter for similar reasons.
The Detroit-based automaker, previously one of the most ambitious U.S. manufacturers with plans to invest $30 billion in electrification, warned of likely additional EV-related costs in 2026 as supplier negotiations continue. Following the disclosure, GM shares dropped nearly 2%. The company has already laid off 1,200 workers at its Factory Zero EV plant in Detroit and 550 employees at an Ohio battery plant indefinitely.
This news comes in the wake of Ford’s December announcement of a similar $19.5 billion charge related to its own EV rollback. This signals a wider industry reevaluation after years of heavy investment in electric vehicle infrastructure.
Source: CNN Business