GM faces a $6 billion loss due to scaling back its commitment to electric vehicles

GM Faces $6 Billion Loss Amid Electric Vehicle Strategy Shift

General Motors has announced it will incur an additional $6 billion in losses as it scales back its electric vehicle initiatives.

This new financial hit comes after the company previously reported a $1.6 billion charge last October related to adjustments in its EV strategy.

The move highlights the steep financial challenges facing legacy automakers following the rollback of federal policies that once encouraged the transition to zero-emission vehicles. These policy changes were enacted under President Donald Trump, reversing efforts to boost EV adoption.

Automakers like GM had poured significant resources into electric vehicle development, anticipating stricter environmental regulations under the Biden administration and expecting more states to follow California’s example by planning to phase out gasoline-powered cars within the next decade. GM had even set a target to produce only electric vehicles by 2035.

However, the Trump administration has since eased emissions standards and reduced financial incentives for EVs, while also contesting states’ rights to implement stricter regulations.

Despite these setbacks, electric vehicles continue to attract strong interest in the U.S., and demand is rising rapidly in international markets.

The majority of GM’s $6 billion charge will be used to resolve obligations with suppliers following the cancellation of certain contracts.

This announcement follows Ford’s decision in December to take a $19.5 billion charge as it also reevaluates its electric vehicle plans.

GM has not revealed any plans to discontinue specific EV models, shut down factories, or implement job cuts at this time. However, in October, the company did announce the elimination of a shift at its Factory Zero EV facility in Detroit, resulting in indefinite layoffs for 1,200 hourly employees. Additionally, 550 workers at an EV battery plant in Ohio were also placed on indefinite layoff.

Electric vehicle sales surged during the summer and September, driven by the impending expiration of a $7,500 federal tax credit for EV buyers. Nevertheless, industry-wide sales of electric vehicles in the U.S. dropped sharply in the fourth quarter, both year-over-year and compared to the record-setting third quarter.

GM CEO Mary Barra emphasized to investors in October that electric vehicles remain central to the company’s vision, but acknowledged that demand for traditional gas-powered vehicles is likely to persist longer than previously anticipated.