GM’s EV Strategy Takes a $6 Billion Blow Amid Policy Changes
General Motors (GM) disclosed on Thursday that it is set to record an approximate $6 billion in fourth-quarter charges. This is due to its withdrawal from electric vehicle production, signifying a stark turnaround from its previously ambitious EV plans.
The substantial write-down is a result of the automaker’s adjustment to the dwindling EV demand. This followed the Trump administration’s decision to eliminate the $7,500 federal EV tax credit in September and ease emissions standards. This recent charge is an addition to a $1.6 billion blow GM suffered in the third quarter, escalating the total EV-related charges to $7.6 billion.
As per the SEC filing, nearly $4.2 billion of the charges will be cash impacts resulting from nullified supplier contracts and settlement fees. Meanwhile, $1.8 billion signifies non-cash impairments. GM has hinted at the possibility of further charges in 2026, albeit at significantly lower levels than 2025.
GM has already laid off 1,200 hourly workers indefinitely at its Factory Zero EV plant in Detroit and eliminated 550 positions at an Ohio battery plant. Despite this, GM maintains that the charges will not impact its current electric vehicle lineup. This lineup comprises roughly a dozen models across Chevrolet, GMC, and Cadillac brands.
The auto industry is witnessing similar trends, with Ford recording a $19.5 billion EV-related charge in December. GM shares experienced a near 3% drop on Friday as investors processed the news. This reflects the broader uncertainty surrounding the speed of America’s transition to electric vehicles.
Source: CNN Business