In a major financial setback, American automotive giant General Motors (GM) declared on Thursday that it will record an additional $6 billion in charges linked to scaling back its electric vehicle (EV) and battery manufacturing operations. This move underscores the growing financial strain from a cooling EV market in the United States, exacerbated by significant policy reversals.
The Mounting Financial Toll
This latest announcement pushes the total writedowns from GM's ambitious electric vehicle push to a staggering $7.6 billion. This figure follows a previous $1.6 billion hit taken in the third quarter. The Detroit-based automaker attributed this strategic pullback directly to shifting market dynamics. "With the termination of certain consumer tax incentives and the reduction in the stringency of emissions regulations, industry-wide consumer demand for EVs in North America began to slow in 2025," GM stated in an official filing. "As a result, GM proactively reduced EV capacity."
The company's decision marks a sharp pivot from its earlier aggressive electrification strategy, largely influenced by the change in the US administration. Under President Joe Biden, federal programs strongly supported EV adoption. However, President Donald Trump, who has publicly questioned climate change, halted these major initiatives, removing crucial government support for the sector.
Market Reaction and Broader Industry Impact
The financial markets reacted swiftly to the news. While GM's stock closed up 3.93% at $85.13 on Thursday, it was trading lower in pre-market activity on Friday. At 6:42 a.m. EST, the stock was at $83.50, down by $1.63 or 1.91%. This development highlights the profound uncertainty caused by the policy U-turn and a persistent American consumer preference for gasoline-powered vehicles.
GM is not alone in facing these headwinds. The company's profit warning comes after rival Ford announced on December 15 that it expects to lose roughly $19.5 billion over several years due to the altered EV policy landscape. Both automakers, along with their competitors, invested tens of billions over recent years to comply with stringent environmental norms and bet on a rapid consumer shift to EVs.
Strategic Recalibration and Future Outlook
GM's fourth-quarter results will incorporate this massive EV cost alongside a separate $1.1 billion loss, primarily from restructuring its Chinese joint venture, SAIC General Motors Corporate Limited. Despite the current retrenchment, GM's long-term vision for electrification hasn't been entirely abandoned.
Under CEO Mary Barra, the company spent heavily during the Biden era to construct EV factories. In 2021, it set an ambitious target to make its light-duty vehicle fleet emission-free by 2035. Barra has reiterated that EVs remain a long-term priority but acknowledged the company is now realigning its investments to match actual customer demand. While GM has warned of potential further financial impacts this year, these painful steps are designed to shield its future profitability from the volatile market conditions.
The situation presents a clear picture of an industry at a crossroads, caught between long-term technological bets and short-term political and market realities.
