A Canadian-assembled Chevrolet Silverado EV and Chevrolet Brightdrop are on display at the Canadian International Auto Show in Toronto, Ontario, Canada, February 13, 2025.
Carlos Osorio | Reuters
DETROIT — General engines Next week’s third-quarter results will include a $1.6 billion hit from its all-electric vehicle plans not going as planned.
The Detroit automaker said in a public filing Tuesday morning that $1.2 billion of the impact would be special non-cash charges resulting from adjustments to its electric vehicle capacity. The remaining $400 million in cash is primarily related to contract cancellation fees and trade settlements associated with electric vehicle investments, according to the filing.
The automaker said its reassessment of its EV capacity and manufacturing footprint was “ongoing,” signaling that additional charges could be announced for future quarters.
The charges will be reported as special items when GM announces its third quarter results on October 21. That means they will impact the automaker’s bottom line but not its adjusted earnings, or adjusted EBIT, which are closely watched by Wall Street.
GM was among the first to invest billions of dollars in an electric vehicle market that has not reached its peak. At one point, the company planned to invest $30 billion by this year in electric vehicles, including dozens of new models and battery production capacity.
The accusations come amid changing regulations surrounding electric vehicles — particularly the end of $7,500 federal tax credits — under the Trump administration compared to President Joe Biden, who has championed the vehicles.
“Following recent U.S. government policy changes, including ending certain consumer tax incentives for the purchase of electric vehicles and reducing the stringency of emissions regulations, we expect the rate of adoption of electric vehicles to slow,” GM said in the filing.
John Murphy, a longtime analyst at Bank of America, warned earlier this year of such writedowns for automakers that have invested heavily in electric vehicles.
“A lot of tough decisions are going to have to be made,” Murphy, who now works at Haig Partners, said in June at an event for Bank of America’s “Car Wars” report. “Based on the study, I think we’re going to see headline-grabbing multibillion-dollar writedowns over the next few years.”
GM EV Removal Fee Comes More Than a Year After Crosstown Rival Ford engine announced a $1.9 billion impact on its EV projects.
Ford included about $400 million for the write-down of manufacturing assets, as well as additional expenses and cash outlays of up to $1.5 billion, including canceling a large three-row electric SUV that was already well in development and delaying production of its next-generation full-size electric pickup truck.
GM, which offers the most electric vehicle models in the United States, has made significant gains this year in its electric vehicle sales, but the size of the market is niche compared to expectations earlier this decade.
Motor Intelligence reported that the Detroit automaker grew from an 8.7% market share in fully electric vehicles at the start of this year to 13.8% in the third quarter – outpacing Hyundai Motor, including Kia, at 8.6% through September. It still lags behind the American leader in electric vehicles Teslawhose market share was estimated at 43.1% until September.