GM becomes the latest carmaker to write down billions in pivot away from EVs
By Claudia Assis
GM's charges grow to $7.1 billion, mostly related to EVs
A GM Cadillac Lyriq electric SUV at an auto show in Shanghai, China. Thursday's EV-related charges are on top of a writedown of more than $1 billion announced last year.
General Motors late Thursday warned investors it will record more than $7 billion in charges in the fourth quarter, mostly related to electric vehicles, less than a month after rival Ford Motor announced its own multibillion-dollar charges related to fading demand for EVs.
It's the latest setback from GM (GM), which in October announced EV-related charges of $1.6 billion.
The end of tax incentives for EVs late last year and a renewed focus from the Trump administration toward traditionally powered vehicles have sapped demand for EVs and have led U.S. carmakers to revisit their long-term EV plans.
Ford (F) in December announced charges of more than $19 billion as it doubled down on hybrids rather than electric cars. That move also spelled the end of the Lightning, the electric version of Ford's best-selling F-150 pickup truck.
Shares of GM fell about 1.4% in the extended session Thursday, after ending the regular trading day up nearly 4%.
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In the filing with securities regulators Thursday, the carmaker detailed charges of about $6 billion related to the EV cutbacks and another $1.1 billion writedown related to restructuring its joint venture in China.
"Our review of EV capacity and investments continued throughout the fourth quarter" resulting in the charges, which include a slew of contract-cancellation fees, supplier settlements and other impairments, the automaker said.
The "strategic realignment" of EV capacity does not impact today's retail portfolio of Chevrolet, GMC and Cadillac EVs in production, and these models will remain available to consumers, GM said.
-Claudia Assis
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01-08-26 2008ET
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