General Motors (GM) announced in a recent SEC filing that it will be taking a significant $6 billion charge to its electric vehicle (EV) business. This decision comes as a result of softer-than-expected demand for EVs and the expiration of the federal EV tax credit at the end of Q3 2025.
The company stated in the filing that the charges will primarily impact GM North America (GMNA) and will include approximately $1.8 billion in non-cash impairments and other non-cash charges, as well as $4.2 billion in cash impacts from supplier settlements, contract cancellation fees, and other charges. Despite these charges, GM assured investors that they will not affect its EBIT-adjusted results.
In addition to the EV-related charges, GM also took a $1.1 billion non-EV-related charge related to a restructuring of its China joint venture with SAIC General Motors (SGM), with $500 million of that amount having a cash impact.
This latest charge adds to the $1.6 billion write-down GM took in Q3 following a reassessment of its EV business, bringing the total EV-related write-down to $6.6 billion. The automaker has been scaling back EV capacity and battery production, shifting some EV plants to produce gas-powered SUVs and trucks instead.
Looking ahead, GM anticipates recognizing additional cash and non-cash charges related to its EV business in 2026, but expects these charges to be significantly less than those incurred in 2025. The company also noted that recent federal changes to greenhouse gas emissions standards will impact its sale of emissions credits.
GM’s move to take this charge follows a similar decision by rival Ford, which posted a $19.5 billion charge due to soft demand in its EV business, particularly for large EVs like the F-150 Lightning, which has been discontinued in its current form.
Investors can expect more details on these charges when GM reports earnings on January 27. For the latest technology news impacting the stock market, click here. Stay updated on financial and business news from Yahoo Finance.
