GM to Take $6 Billion Hit as It Scales Back Electric Vehicle Investments

General Motors (GM) announced on Thursday that it would take a USD 6 billion charge to unwind portions of its electric-vehicle (EV) investments, becoming the latest automaker to scale back in response to the Trump administration’s policies and softening demand for battery-powered vehicles.

GM’s EV sales fell 43 percent in the fourth quarter, following the loss of the federal tax credit. The company had seen record sales in the previous three months as consumers rushed to buy EVs before the credit’s expiration.

Supply Chain Fallout and Cancelled Contracts

According to a regulatory filing, the charge includes a USD 4.2 billion cash write-down tied to contract cancellations and settlements with suppliers who had expected higher EV production volumes before market conditions shifted. The automaker said the writedown stems from reduced EV production plans and related supply chain disruptions.

GM will record the charge as a special item in its fourth-quarter earnings report. The company also expects additional, though smaller, charges in 2026 as it continues negotiations with its supplier network. Despite these cuts, GM will continue offering its current lineup of about a dozen EV models.

GM’s Shifting Strategy

Once among the most ambitious EV proponents, GM had pledged to phase out internal-combustion engines by 2035. However, the company has been re-evaluating its strategy over the past year. In addition to the new writedown, GM reported a USD 1.1 billion charge in the fourth quarter related to the restructuring of its China joint venture.

The automaker also paused production of EV batteries for six months at two joint-venture plants and scaled back operations at its Detroit EV-only factory to a single shift. Plans for another Michigan EV factory have been shelved, with the facility now set to produce the Cadillac Escalade and full-size pickups instead.

EV Setbacks Across the Auto Industry

GM’s move follows a similar but larger charge announced by Ford Motor Co., which revealed in December that it would take a USD 19.5 billion writedown over multiple quarters as it terminated several EV programs, including the all-electric F-150 Lightning and other electric truck and van projects.

The broader industry slowdown began last summer after President Donald Trump’s tax and spending package dampened the EV market outlook. The situation worsened after the USD 7,500 federal tax credit for EV buyers was eliminated on September 30, causing EV sales to plunge.

Industrywide, the slowdown is expected to persist. Automotive data provider Edmunds projects that EVs will make up about 6 percent of total US vehicle sales in 2026, down from 7.4 percent in 2025, reflecting continued cooling demand despite manufacturers’ earlier ambitions.