GM to Record $6bn Charge After Scaling Back Electric Vehicle Plans
General Motors has announced it will take a further $6bn hit to its earnings after scaling back its electric vehicle (EV) strategy, adding to a $1.6bn charge disclosed in October.
The move highlights the growing financial impact on traditional automakers following policy changes under President Donald Trump, who rolled back federal incentives and emissions regulations designed to accelerate the transition to zero-emission vehicles.
GM, like several major carmakers, had invested heavily in EV development in anticipation of stricter environmental rules introduced during the Biden administration. The company had also expected more US states to follow California’s lead by phasing out petrol-powered vehicles within the next decade. In line with those expectations, GM previously pledged to produce only electric vehicles by 2035.
However, the regulatory landscape has since shifted. The Trump administration has eased emissions standards, withdrawn financial support for EV buyers and challenged the authority of states to impose tougher environmental rules. These changes have forced carmakers to rethink their long-term strategies.
Despite the setback, GM said electric vehicles remain part of its future, noting that demand continues in the US and is growing strongly in overseas markets. The company added that most of the $6bn charge will be used to settle contracts cancelled with parts suppliers linked to its revised EV plans.
GM’s announcement follows a similar move by Ford, which revealed in December it would take a $19.5bn charge related to changes in its electric vehicle strategy.
While GM has not confirmed plans to discontinue any specific EV models or shut factories, it previously announced job impacts in October. The company cut one production shift at its Factory Zero EV plant in Detroit, placing about 1,200 workers on indefinite layoff. A further 550 workers at an EV battery facility in Ohio were also laid off.
Electric vehicle sales surged over the summer and in September, driven by buyers rushing to take advantage of a $7,500 federal tax credit before its scheduled expiry. However, industry-wide EV sales dropped sharply in the final quarter of the year compared to both the previous year and the record third quarter.
GM chief executive Mary Barra told investors in October that EVs “remain our North Star,” but acknowledged it is now clear that petrol and diesel vehicles will dominate sales for longer than previously expected.
The company said it will continue to balance its investments between traditional vehicles and electric models as market conditions evolve.
