GM to take about $6 billion in charges as EV incentives end

General Motors will record about $6 billion in charges in the fourth quarter after the U.S. cut tax incentives to buy electric vehicles and eased auto emissions standards, the company said late Thursday in a filing with the Securities and Exchange Commission.

The charges follow GM’s earlier plan, announced in October, to take a $1.6 billion charge for the same reasons in the previous quarter, a step the company described as part of a broader reassessment as automakers adjust ambitious plans to convert their fleets to electric power.

The company’s shares slid almost 3% Friday after the announcement.

In its SEC filing, GM said the $6 billion in charges includes non-cash impairments and other non-cash charges of about $1.8 billion, and also includes supplier commercial settlements, contract cancellation fees and other charges of approximately $4.2 billion.

The U.S. EV tax credit ended in September. The AP report described the clean vehicle tax credit as worth $7,500 for new EVs and up to $4,000 for used ones.

GM had positioned electric vehicles as the future of the U.S. auto industry, announcing in 2020 that it would invest $27 billion in electric and autonomous vehicles over the next five years—an increase of 35% over plans made before the pandemic. At the time, GM expected more than half of its factories in North America and China to be capable of making electric vehicles by 2030, and pledged nearly $750 million more for EV charging networks through 2025.

GM also said its goal was to make the vast majority of its vehicles electric by 2035, and to make the entire company carbon neutral five years after that. The AP report said those plans have been shaken by differences in economic and environmental policies between the Biden and Trump administrations.

As policy uncertainty reshapes strategies in the U.S., the AP report said China has emerged as a global leader in electric vehicle technology, with factories there producing millions of cars and building the groundwork for a large charging network.

Earlier this month, the AP report said Tesla was dethroned as the world’s largest EV automaker and replaced by China’s BYD, which produced 2.26 million electric vehicles last year.

Also Friday, Netherlands-based Stellantis said it would phase out plug-in hybrid programs in North America beginning with the 2026 model year, and focus on more competitive electrified solutions. The AP report said Stellantis owns Jeep, Dodge, Chrysler and other carmakers.