GM Cuts EV Exposure After Policy Shift, Takes $6B Charge

Imagine all of the malinvestment that took place in autos, on EVs, thank to the government distorting markets and forcing EV adoption when genuine demand may not have been robust. Now, we’re seeing the consequences of returning to a freer market.

General Motors will record a $6 billion charge after scaling back several electric-vehicle projects, reflecting both weaker demand and the impact of new federal policies under President Donald Trump, according to Reuters.

Most of the charge — $4.2 billion in cash — stems from terminating contracts and compensating suppliers that had prepared for higher EV production. GM said the charge will appear as a special item in its fourth-quarter earnings. Additional costs are expected in 2026 but will be smaller than the current year’s EV-related charges.

Despite the pullback, the company said its U.S. lineup of about a dozen EVs remains intact: “We plan to continue to make these models available to consumers.”

GM’s announcement follows Ford’s much larger move in December, when it revealed a $19.5 billion writedown after canceling several EV programs. Ford CEO Jim Farley said at the time: “When the market really changed over the last couple of months, that was really the impetus for us to make the call.”

Automakers across the industry began retreating from aggressive EV expansion last summer after a sweeping Trump tax and spending package and the elimination on September 30 of the $7,500 federal EV tax credit, which triggered a sharp drop in sales. GM’s EV deliveries fell 43% in the fourth quarter, after customers had rushed purchases before the credit expired.

Reuters writes that while GM once pledged to phase out gasoline vehicles by 2035, analysts have since lowered long-term EV forecasts. GM CEO Mary Barra has said the company will adjust based on customer demand.

The company has already slowed EV operations: halting battery production at two joint-venture plants, cutting shifts at its Detroit EV factory, and repurposing a planned Michigan EV facility to build gas-powered pickups and the Cadillac Escalade. GM also disclosed a separate $1.1 billion charge tied to restructuring its China joint venture.

Some analysts question GM’s heavy focus on fully electric vehicles. CFRA analyst Garrett Nelson warned: “GM’s lack of hybrid exposure could partially reverse recent market share gains,” citing surging hybrid demand.

Industrywide, EV sales growth has slowed dramatically. Research firm Omdia reported U.S. EV sales rose just 1.2% in 2025, and Edmunds projects EVs will represent about 6% of U.S. vehicle sales in 2026, down from 7.4% last year.