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General Motors said it would lower its earnings by that amount to mainly reflect the drop in the value of equipment, factories and other assets.
Oct. 14, 2025, 6:48 a.m. ET
The slowdown in electric car sales in now starting to ripple through the finances of automakers.
On Tuesday, General Motors said that it would record a $1.6 billion hit to its earnings, mainly to reflect the drop in value of plants, equipment and other assets related to its electric vehicle operations.
The pace of sales for battery-powered cars and trucks has been slowing since the beginning of 2024, and are now expected to tumble after Congress and President Trump eliminated, on Sept. 30, a federal tax credit of $7,500 that was available to purchasers of new models.
In a filing with the Securities and Exchange Commission, G.M. said that it would take a $1.2 billion accounting charge “as a result of adjustments to our E.V. capacity” and a $400 million cash hit related to canceling supplier contracts associated with E.V. investments.
“The reassessment of our E.V. capacity and manufacturing footprint, including our investments in our battery component manufacturing, is ongoing,” the company said in the filing, warning that it was “reasonably possible” that it could face more charges in the future.
In recent investor presentations, G.M.’s chief financial officer, Paul Jacobson, said the company had not yet been able to earn a profit on its electric cars. Now that it expects lower sales, the company is working to focus on making them at lower costs.
“The journey to profitability was heavily driven by scale, and the reality is we’re probably going to scale up much slower now over the next few years,” he said last month at a conference hosted by JP Morgan. “But we’re in a position now where we have the opportunity to deploy the capital into electric vehicles not to proliferate the portfolio, but rather to focus on structural cost reductions within E.V.s.”
Sales of electric vehicles surged in the third quarter as consumers rushed to buy cars while the $7,500 tax credit was still available. Analysts now expect a substantial drop in sales that will likely linger well into 2026. And it remains unclear when the market will rebound.
“We need to let it settle and understand where is that natural demand going and how do we meet that natural demand and ultimately try to lead customers to electric vehicles,” Mr. Jacobson said.
G.M. has already planned to slow electric vehicle production between now and the end of the year. The plants affected are in Spring Hill, Tenn., and Hamtramck, Mich. Earlier this year, it sold its stake in a battery plant that it had been building in a partnership with LG Energy Solution.
G.M. and LG continue to build batteries in joint-venture plants in Spring Hill and Warren, Ohio.
Other automakers have taken similar steps. Stellantis, the maker of Chrysler, Jeep and Ram vehicles, has dropped plans for an electric pickup truck, and is now working to bring back some gas-powered models it had stopped making. Volkswagen scrapped a plan to sell an electric sedan in the United States, while Honda has done away with plans for an electric Acura.
Ford Motor had once planned to build four battery plants in the United States. It started production at one in Kentucky in August, and expects to open one in Michigan next year. But completion dates have been pushed back for the other two.
Ford has also delayed or scrapped some models it was working on. It now aims to introduce a midsize electric pickup truck in 2027. The automaker’s electric vehicle business lost $2.2 billion in the first half of this year.
Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal.
