General Motors (GM) expects to take US$6 billion (A$8.95 billion) of charges in the three months ended 31 December 31, 2025 as it pulls back its commitment to the electric vehicle (EV) market.
The American car manufacturer said these charges include non-cash impairments and other non-cash charges of about $1.8 billion, supplier commercial settlements, contract cancellation fees, and other charges of about $4.2 billion.
They relate to the reduction in GM’s planned EV production and the impact on its supply chain and come only weeks after rival Ford Motor (F.N) disclosed a large charge.
GM is the latest car maker to pull back from EVs in response to United States President Donald Trump administration's policies and fading demand.
"We expect to recognize additional material cash and non-cash charges in 2026 related to continued commercial negotiations with our supply base, which we believe will be significantly less than the EV-related charges incurred in 2025,” the company said in a Form 8K filed with the United States Securities and Exchange Commission (SEC).
“In addition, proposed regulatory changes to the greenhouse gas emission standards could result in an impairment of our emissions credits, similar to the previous impairment we recognized related to our CAFE (U.S. Corporate Average Fuel Economy program) credits.
“Such charges may adversely affect our results of operations and cash flows in the period in which they are recognised.”
GM said that for several years the global automotive industry and it had invested significant capital to develop EVs to meet increasingly stringent fuel economy and emissions regulations in the U.S. and growing customer demand.
To realise economies of scale GM added EV production to assembly plants and developed a dedicated EV architecture and propulsion strategy, helping it to become the second biggest seller of EVs in North America in the second half of 202.
But demand for EVs in North America began to slow in 2025 due to the end of consumer tax incentives and the reduction in the stringency of emissions regulations and as a result GM reduced EV capacity.
In October the company announced a broader reassessment of its EV capacity and manufacturing footprint to align with expected consumer demand and U.S. Government policy changes and recorded charges of $1.6 billion.
GM shares (NYSE: GM) closed $2.26 (2.65%) lower at $82.87 on Friday (Saturday AEDT), capitalising the company at $77.31 billion.
