General Motors Forecasts $1.6B Loss as EV Strategy Overhaul Takes Shape

General Motors announced that it expects to take a $1.6 billion hit next quarter due to changes to U.S. government policies that discontinued electric vehicle consumer tax incentives and are seeking to relax emissions regulations.

Credits and Emissions

The electric vehicle tax credit, previously offering up to $4,000 for used vehicles and $7,500 for new ones, ended on September 30. Meanwhile, the EPA plans to ease auto tailpipe emissions standards, aligning with President Donald Trump's effort to reverse policies that encourage the transition to electric.

$1.6B in Charges

GM stated in a regulatory filing that it will record $1.2 billion in charges because of adjustments to its electric vehicle capacity. The automaker also expects to incur $400 million in charges related to commercial settlements and contract cancellation fees tied to electric vehicle investments. It added that it could face more charges amid production adjustments.

The company stated that the realignment to its electric vehicle capacity would not impact the retail portfolio of GMC, Cadillac, and Chevrolet models currently in production.

Previous Investments

In 2020, GM announced a $27 billion investment in autonomous and electric vehicles over five years. A year later, the automaker said it planned to equip over half of its Chinese and North American factories for electric vehicle production by the decade's end.

Image credit: Jonathan Weiss/Shutterstock

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