General Motors (GM) announced on Thursday that it will take a $6 billion charge as it scales back portions of its electric vehicle (EV) investments. This follows a $1.6 billion charge in October 2025 related to changes in its EV strategy. The decision reflects both softening demand for electric vehicles in the US and a policy shift under the Trump administration, which rolled back federal EV incentives and emissions rules.
Supply Chain Fallout and Canceled Contracts
GM’s latest charge includes a $4.2 billion cash write-down associated with canceled contracts and settlements with suppliers who had anticipated higher EV production. The remainder of the charge reflects other adjustments tied to restructuring and production scale-backs. The company will report this charge as a special item in its fourth-quarter earnings, with smaller additional charges expected in 2026 as negotiations with suppliers continue.
While GM is scaling back its EV investments, it will continue offering its current lineup of EV models, totaling around a dozen vehicles. The company has not announced plans to discontinue any specific models, close factories, or cut additional jobs, though previous measures included placing 1,200 workers at its Detroit Factory Zero and 550 workers at its Ohio EV battery plant on indefinite layoff.
Strategic Shifts and Industry Context
Once one of the most ambitious EV proponents, GM had pledged to phase out internal-combustion engines by 2035. The company has now re-evaluated its strategy, pausing battery production for six months at two joint-venture plants, scaling back operations at its Detroit EV factory to a single shift, and converting another Michigan EV facility to produce Cadillac Escalade and full-size pickups.
Ford Motor Co. announced a similar but larger charge of $19.5 billion in December, highlighting industry-wide challenges following the loss of the $7,500 federal electric vehicle tax credit and policy changes.
EV Market Slowdown
US EV sales plunged in the fourth quarter of 2025 after record summer demand ahead of the tax credit expiration. Automotive data provider Edmunds projects that EVs will account for only 6% of total US vehicle sales in 2026, down from 7.4% in 2025, signaling a continued cooling in the market despite earlier ambitious production targets.
GM CEO Mary Barra emphasized that “electric vehicles remain our North Star,” but acknowledged that internal combustion engine vehicles “will remain higher for longer”, reflecting the new market reality.
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