GM’s EV Backpedal Comes With a Billion-Dollar Price Tag
Key Points
- GM will take a $6 billion charge to unwind parts of its EV strategy, largely tied to canceled supplier contracts and reduced production expectations as U.S. EV demand cools.
- The writedown follows the expiration of federal EV tax credits and mirrors similar pullbacks by other automakers, including Ford, as sales growth slows and policy support weakens.
- GM says the charge does not affect its current EV lineup, but it has already paused battery production, redirected factory plans, and benefited recently from strong sales of gas-powered trucks and SUVs.
General Motors has been hit with a $6 billion charge tied to its electric-vehicle business, the clearest signal yet that the company is recalibrating its EV plans as the bottom has rapidly fallen out of the segment.
The writedown, disclosed in an SEC regulatory filing, is a reflection of the automaker's reduced EV production expectations and the subsequent downstream impact on GM’s supplier network.
Cancelling contracts and settlements with suppliers that had tooled up for much higher EV volumes will cost GM $4.2 billion in cash. The automaker said the expense will be recorded as a special item in its fourth-quarter earnings and warned that there are likely to be additional, albeit smaller charges throughout 2026 as negotiations with suppliers continue.
GM also said the writedown will not change its current U.S. EV lineup, which still has a rough dozen battery-electric models across Chevrolet, GMC, Cadillac, and Buick.
GM had been among the most aggressive legacy automakers in its EV ambitions, at one point even planning to phase out internal-combustion vehicles by 2035, which was on par with the most aggressive plans from Volkswagen—and look how well that's working out.
While GM's target has not been formally abandoned, actions speak louder than words—the company has already slowed or paused battery production at joint-venture plants, cut EV output at its Detroit Factory Zero facility, and redirected a planned Michigan EV plant to build full-size pickups and Cadillac Escalades instead.
If it sucks to be a GM shareholder, things look even worse across town at Ford. The Blue Oval recently disclosed nearly $20 billion in EV-related writedowns after canceling or delaying multiple programs, including killing the F-150 Lightning.
Both decisions come against the backdrop of policy changes under the Trump administration, including the expiration of the $7,500 federal EV tax credit at the end of September, which triggered a sinkhole that swallowed EV demand after a brief pre-deadline buying surge—a dead cat bounce if there ever was one.
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, been over the wall during the Rolex 24, and worked in the intense world of IndyCar.
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I'm shedding crocodile tears for the auto industry.
F150 Lightning couldn't go 100 miles pulling a trailer. Early, wealthy, adopters got theirs to show up at parties in. Better have a gas generator to go camping and charge the battery in the woods. And a $7,500 credit by a government 35 trillion in debt? This should not be a surprize.
And, don't mandate us, Uncle Sam!