Dive Brief:
- General Motors recorded $6 billion in electric vehicle-related charges primarily in North America in Q4 2025 as it realigns its strategy to produce more full-size internal combustion engine trucks and SUVs, according to a Jan. 8 securities filing.
- The charges include a $1.8 billion non-cash write-down to devalue its EV manufacturing assets and another $4.2 billion in costs to settle related supplier contracts, which were primarily battery supply deals, per the filing.
- The automaker cited weakening EV demand and the termination of certain consumer tax incentives, combined with a reduction of more stringent emissions regulations, for its strategic shift from EVs to producing more ICE vehicles.
Dive Insight:
In addition to the $6 billion in charges for North America, GM expects that its total charges in Q4 will be $7.1 billion. It includes an additional $1.1 billion in non-EV-related charges related to the restructuring of its China joint venture, SAIC General Motors, which is primarily related to the company’s share of supplier claims and additional legal accrual, per the filing.
In October 2025, GM’s Audit Committee also approved a $1.6 billion impairment charge as part of a strategic realignment of its electric vehicle manufacturing capacity. It included $1.2 billion in non-cash impairments and $400 million in cash costs for contract cancellations and settlements related to its previous EV investment strategy.
GM said that ramping up production of full-size trucks and SUVs will help it meet “unmet demand.”
“GM proactively reduced EV capacity, including by pivoting the company's assembly plant in Orion, MI from EV production to the production of full-size SUVs and full-size pickups powered by internal combustion engines,” the automaker wrote in the securities filing.
However, the automaker stated that its realignment will not impact the current retail portfolio of Chevrolet, GMC and Cadillac EVs already in production, which includes the Equinox, Bolt EV, Lyriq SUV, Silverado EV and Hummer EV. GM said it will continue to make these models available to customers.
Last October, the automaker confirmed to WardsAuto that it is cutting roughly 3,400 jobs at its EV and battery plants as it scales back EV production, including Factory Zero, the former Detroit-Hamtramck Assembly in Detroit, and its Ultium Cells battery plant in Warren, Ohio. The bulk of the layoffs were effective Jan. 5.
GM also warned of additional material cash and non-cash charges in 2026 related to supplier negotiations, but it expects they will be lower than 2025 figures. The automaker also warned that proposed changes to greenhouse-gas standards could devalue emissions credits, potentially leading to further impairments.
Ford Motor Co. is also abandoning its previous EV strategy due to low demand for vehicles such as the F-150 Lightning and Mustang Mach-E. In December, the automaker announced a major shift in its electrification plans, which includes ramping up production of ICE F-Series trucks and a pivot to extended-range hybrid vehicles and more affordable smaller EVs. Ford expects to record about $19.5 billion in nonrecurring costs as part of its new long-term strategy, a majority of that in Q4 2025.
GM will release its Q4 and full-year 2025 financial results on Jan. 27.
