GM Expects US$1.6 Billion Loss on EV Production Cuts

General Motors announced on Oct. 14 that it will incur a US$1.6 billion loss due to slowing US electric vehicle (EV) demand and reductions in production plans. The Detroit automaker attributed US$1.2 billion of the charges to adjustments in EV manufacturing capacity, with the remaining US$400 million stemming from cancelled contracts and settlements related to EV investments. 

“Following recent US government policy changes, including the termination of certain consumer tax incentives for EV purchases and the relaxation of emissions regulations, we expect EV adoption to slow,” GM said in a filing. The company had planned to invest US$30 billion in EVs by 2025 and phase out gasoline and diesel vehicles globally by 2035, but the rollback of federal tax credits has dampened US consumer uptake.

GM is reducing production of the Chevrolet Bolt and scaling back output of the Cadillac Lyriq and Vistiq, calling the moves “strategic production adjustments in line with expected slower EV industry growth and customer demand.” The company also indicated that broader adjustments to its manufacturing footprint are “ongoing,” suggesting additional costs may arise.

The US policy shift follows the end of federal tax credits that had supported domestic EV purchases. GM faces competition from Chinese manufacturers, projected to produce roughly 70% of global EVs in 2025, underscoring the growing international challenge.

Ford has similarly responded to the slowdown, taking a US$1.9 billion charge last year and reducing EV model production. CEO Jim Farley stated that the US EV market “will be way smaller than we thought,” highlighting broader industry constraints.