The firm said the impact includes $1.2 billion in non-cash impairment and other charges as a result of its adjustments to EV capacity, and $400 million towards contract cancellation fees and commercial settlements.
General Motors Co. (GM) on Tuesday announced that it will take a $1.6 billion charge in the third quarter (Q3) ending Sept. 30, 2025, as it realigns its electric vehicle strategy based on consumer demand.
In a filing with the U.S. Securities and Exchange Commission (SEC), GM said the impact includes $1.2 billion in non-cash impairment and other charges as a result of its adjustments to EV capacity. In addition, the company stated that it has incurred charges of $400 million in relation to contract cancellation fees and commercial settlements associated with EV-related investments.
“The reassessment of our EV capacity and manufacturing footprint, including our investments in our battery component manufacturing, is ongoing, and it is reasonably possible that we will recognize additional future material cash and non-cash charges,” the company stated.
General Motors’ shares were down 3% in Tuesday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘bullish’ territory at the time of writing.
The Detroit-based automaker had initially planned to invest up to $35 billion in electric vehicles and autonomous vehicles by 2025, with an aim to deliver 30 new EVs globally by this time. GM also projected that its revenue from EVs would grow from nearly $10 billion in 2023 to $90 billion annually by 2030.
GM’s change of tack in the EV segment comes amid changing EV regulations under the Trump administration, including the end of the $7,500 federal tax credit.
“Following recent U.S. Government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow,” the company stated.
GM stock is up 4% year-to-date and 16% in the last 12 months.
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