General Motors is taking a dramatic step by writing down $6 billion tied to its electric vehicle plans. The company is scaling back some EV investments after facing lower demand and changing market conditions. As a result, GM must cancel or renegotiate contracts with suppliers who had prepared for higher production.
This move comes just weeks after other automakers made similar adjustments. In addition, GM continues to adjust production at factories and joint ventures, both in the U.S. and abroad. Despite these cuts, the company will keep its current lineup of EVs available, signaling that it still believes in electric vehicles while managing costs.
General Motors to Take Massive $6 Billion Charge
General Motors (GM) is making headlines with a massive $6 billion writedown tied to its electric vehicle (EV) plans. The move comes as the automaker scales back some of its EV investments due to changing market conditions. The writedown mainly stems from the decision to reduce planned EV production and the impact this has on its supply chain.
Most of the charge, about $4.2 billion, will hit GM’s cash accounts. This is related to contract cancellations and settlements with suppliers who had expected higher production volumes. The company said these suppliers were preparing for a much bigger EV output before market conditions changed.
Despite the writedown, GM stressed that it will continue to offer its existing lineup of EV models. The automaker currently boasts roughly a dozen battery-powered vehicles, one of the largest offerings in the U.S. EV market. GM confirmed that all current models will remain available to consumers.
The company plans to report this $6 billion charge as a special item in its fourth-quarter earnings. Additional charges may occur in 2026 due to ongoing negotiations with suppliers, but these are expected to be smaller than the current writedown. Shares of GM fell 2% in after-hours trading, though they had ended the regular session up 3.9% at $85.13.
Scaling Back After Betting Big on EVs
GM made one of the largest bets on EVs among global automakers, aiming to phase out traditional internal-combustion vehicles by 2035. However, the automaker is now recalibrating after facing market challenges.
Many automakers, including GM, have been adjusting EV production since late 2025. A major factor has been policy changes under the Trump administration, along with a significant drop in consumer demand. The removal of a $7,500 federal tax credit for EV buyers on September 30, 2025, caused sales of electric vehicles to fall sharply.
Rival automaker Ford also took a large writedown, about $19.5 billion, as it canceled several EV programs. GM’s approach is smaller but still significant in the context of its overall EV strategy.
GM had been gaining traction in EV sales in late 2024 after several years of manufacturing challenges. By introducing lower-cost models, GM became the second-largest EV seller in the U.S., behind Tesla. Yet the new writedown reflects the difficulties the automaker faces in scaling its electric vehicle business amid fluctuating consumer interest.
Impact on Production and Supply Chain
The $6 billion charge is largely due to supply chain adjustments. GM has been negotiating with suppliers who had prepared for higher EV production. The cost of canceling or changing contracts with these suppliers is substantial, resulting in the $4.2 billion cash impact.
In addition to U.S. operations, GM will record a $1.1 billion charge in the fourth quarter related to restructuring its China joint venture. These write-offs highlight the challenges GM faces both domestically and internationally.
Blockchain sleuths spot DOJ Bitcoin move to Coinbase as mysterious $6.3M sale sparks firestorm
Earlier actions also include halting EV battery production at two joint-venture plants for six months and reducing output to one shift at an EV-only factory in Detroit. Plans for another Michigan factory originally set for EV production were scrapped. Instead, that facility will produce the Cadillac Escalade and full-size pickup trucks.
The automaker continues to benefit from strong sales of gas-powered pickups and SUVs in the U.S., helping it gain market share even as its EV business slows. Analysts note that GM’s focus on fully electric vehicles, rather than hybrids, could partially affect market gains as hybrid models gain popularity.
Industry-wide, EV sales fell sharply after the loss of the federal tax credit. GM’s EV sales dropped 43% in the fourth quarter of 2025, compared to record highs in the prior months when buyers rushed to benefit from the credit. Overall EV growth in the U.S. was slow, rising just 1.2% in 2025, according to industry data.
GM’s writedown reflects broader trends in the EV market and the challenges automakers face in balancing ambitious electric plans with changing consumer behavior and policy shifts.
