（Singapore, 09.01.2026）General Motors is taking a major financial hit as it reins in its ambitious push into electric vehicles, highlighting how quickly the outlook for EVs has changed in the United States. The automaker said it will record a $6 billion writedown after cutting back on electric vehicle and battery production plans, adding to earlier charges and bringing its total EV-related writedowns to about $7.6 billion.
The decision reflects weaker consumer demand, the loss of government incentives, and a broader industry rethink about how fast Americans are willing to switch from gasoline-powered vehicles to fully electric ones. GM’s stock price dipped on the news, illustrating investor concerns even as the company’s shares have performed strongly over the past year.
A Costly Pullback from an Aggressive EV Bet
On Thursday, General Motors said most of the $6 billion charge will come from unwinding contracts with suppliers who had prepared for much higher EV production volumes. About $4.2 billion of the writedown represents cash costs tied to canceled contracts and settlements across GM’s supply chain.
The charge will be recorded as a special item in GM’s fourth-quarter earnings. The company said it expects more EV-related charges in 2026 as negotiations with suppliers continue, but those costs should be smaller than what it absorbed in 2025.
GM stressed that it is not abandoning electric vehicles entirely. The company still offers roughly a dozen EV models in the U.S., the broadest lineup among traditional automakers, and said it plans to keep these vehicles available to customers. However, production volumes are being adjusted to better match demand.
Shares of GM fell by about 2% in after-hours trading following the announcement, after the stock had ended the regular session up 3.9% at $85.13. The stock’s year-long performance has been strong, with shares climbing significantly amid broader market gains even as EV sentiment has cooled.
The writedown comes as EV sales have dropped sharply following the expiration of a $7,500 federal tax credit at the end of September. Buyers rushed to purchase electric cars before the incentive ended, pushing sales to record levels in the third quarter. But demand fell steeply in the final months of the year, including a 43% drop in GM’s EV sales in the fourth quarter.
Industrywide, growth has slowed dramatically. EV sales rose just 1.2% in 2025, according to research firm Omdia, while automotive data provider Edmunds estimates electric vehicles will make up only about 6% of U.S. vehicle sales in 2026, down from 7.4% a year earlier.
These trends have forced automakers to reassess plans that were made when EV demand was expected to rise rapidly, supported by strict emissions rules and generous incentives.
Policy Shifts, Profits, and What Comes Next
GM’s retreat is closely tied to policy changes under President Donald Trump, whose administration rolled back emissions regulations and ended federal financial support for EV buyers. Automakers had invested billions in anticipation of tougher environmental rules and faster adoption of zero-emission vehicles.
GM was among the most ambitious. It committed about $35 billion to EVs and batteries and once pledged to phase out internal-combustion vehicles by 2035. While that long-term goal has not been formally scrapped, the company is now taking a more cautious, demand-driven approach.
Chief Executive Officer Mary Barra has said GM will follow customer demand, acknowledging that gasoline-powered cars and trucks “will remain higher for longer.” In practice, this has meant refocusing on profitable pickups and SUVs while trimming EV production.
GM has already paused battery production at two joint-venture plants, reduced output at its EV-only Factory Zero plant in Detroit and shifted plans for a Michigan factory away from electric vehicles toward gas-powered models like the Cadillac Escalade and full-size pickups.
Rival automakers are making even sharper cuts. Ford Motor announced in December it would take a $19.5 billion writedown tied to canceling several EV programs. Ford CEO Jim Farley said the move was painful but necessary as the market cooled down.
Despite the pullback, GM insists EVs remain part of its future. The company is working to lower costs through new battery technology and continues to sell EVs in other markets, including China. Maintaining an EV foothold could also prove important as competition from companies like Tesla and Chinese automakers intensifies.
For now, however, GM’s $6 billion write-down underscores a hard lesson for the auto industry: the transition to electric vehicles is proving slower, riskier, and far more expensive than many executives once believed.
