General Motors will record approximately $6 billion in charges in the fourth quarter after the U.S. government ended tax incentives for electric vehicle purchases and relaxed auto emissions standards, the Detroit automaker disclosed in a Securities and Exchange Commission filing Thursday. GM shares fell almost 3% Friday.
The charges — totaling more than the $1.6 billion GM disclosed for the third quarter in October — signal a broad reckoning across the U.S. auto industry as federal policy reversals force automakers to unwind billions of dollars in commitments made during a period of aggressive electrification targets.
What the charges include
The $6 billion in fourth-quarter charges breaks into two main categories, according to GM’s SEC filing: non-cash impairments and other non-cash charges of about $1.8 billion, and supplier commercial settlements, contract cancellation fees, and other charges of approximately $4.2 billion.
The EV tax credit, which had been worth $7,500 for new electric vehicles and up to $4,000 for used ones, ended in September. The Trump administration also eased auto emissions standards that had pressured automakers to accelerate electrification of their fleets.
GM’s earlier ambitions
GM had been among the most aggressive of U.S. automakers in committing to an electric future. In 2020, the company announced plans to invest $27 billion in electric and autonomous vehicles over five years — a 35% increase over pre-pandemic plans.
GM expected more than half of its factories in North America and China to be capable of producing electric vehicles by 2030, and pledged to increase its EV charging infrastructure investment by nearly $750 million through 2025. Its stated goal was to make the vast majority of its vehicles electric by 2035 and reach company-wide carbon neutrality five years after that.
Those plans have been shaken, GM said, by the sharp differences in economic and environmental policies between the Biden and Trump administrations.
Stellantis joins retreat; BYD tops Tesla
The GM announcement came on the same day Netherlands-based Stellantis — which owns Jeep, Dodge, Chrysler, and other brands — said it would “phase out plug in hybrid (PHEV) programs in North America beginning with the 2026 model year, and focus on more competitive electrified solutions,” citing shifting customer demand.
The announcements also follow a significant shift in the global EV market. China’s BYD displaced Tesla as the world’s largest electric vehicle automaker earlier this month, according to the AP report. BYD produced 2.26 million electric vehicles last year.