A Chevrolet Silverado EV and a Chevrolet Brightdrop, which is assembled in Canada, are seen on display at the Canadian International AutoShow in Toronto, Ontario, Canada, February 13, 2025.
Carlos Osorio | Reuters
DETROIT — General Motors’ third-quarter results next week will include a $1.6 billion impact from its all-electric vehicle plans not playing out as anticipated.
The Detroit automaker Tuesday morning in a public filing said $1.2 billion of the impact will be non-cash, special charges as a result of adjustments to its EV capacity. The other $400 million in cash is primarily related to contract cancellation fees and commercial settlements associated with EV-related investments, according to the filing.
The automaker said its reassessment of its EV capacity and manufacturing footprint is “ongoing,” signaling additional charges could be announced for future quarters.
The charges will be reported as special items when GM reports its third quarter results on Oct. 21. That means they will impact the automaker’s net results but not its adjusted earnings, or EBIT-adjusted, which are closely watched by Wall Street.
GM was among the earliest to invest billions of dollars in an EV market that didn’t culminate. At one point, the company was planning to invest $30 billion by this year in EVs, including dozens of new models and capacity for battery production.
The charges come amid changing regulations regarding EVs — particularly the end of $7,500 in federal tax credits — under the Trump administration as compared to President Joe Biden, who championed the vehicles.
“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,” GM said in the filing.
John Murphy, a longtime analyst with Bank of America, warned earlier this year of such write-downs for automakers that invested heavily in EVs.
“There’s a lot of tough decisions that are going to need to be made,” Murphy, who’s now with Haig Partners, said in June during an event for Bank of America’s “Car Wars” report. “Based on the study, I think we’re going to see multibillion-dollar write-downs that are flooding the headlines for the next few years.”
GM’s EV pullback charges come more than a year after crosstown rival Ford Motor announced a $1.9 billion impact from its EV plans.
Ford’s included about $400 million for the write-down of manufacturing assets, as well as additional expenses and cash expenditures of up to $1.5 billion that included canceling a large, electric three-row SUV that was already far in development and delaying production of its next-generation electric full-size pickup truck.
GM, which offers the most EV models in the U.S., has made significant gains this year in EV sales, but the size of the market is niche compared with expectations at the beginning of this decade.
Motor Intelligence reported that the Detroit automaker went from an 8.7% market share in all-electric vehicles to begin this year to 13.8% through the third quarter – topping Hyundai Motor, including Kia, at 8.6% through September. It still trails U.S. EV leader Tesla, which was estimated to have a 43.1% market share through September.
