GM writes off $1.6B in idle EV plants amid U.S. policy rollback
General Motors (GM) announced on Tuesday that it has written off approximately $1.6 billion in electric vehicle production facilities that are no longer in use due to policy shifts under the Trump administration.
According to a public filing Tuesday morning, $1.2 billion of the total would be recorded as non-cash charges tied to adjustments in its EV production capacity. The remaining $400 million represents cash costs, primarily for contract termination fees and commercial settlements associated with the EV projects.
The automaker labelled the loss to the SEC as an impairment charge, indicating that certain assets are unlikely to deliver their projected profits.
Q3 sales at GM doubled, driven by a last-minute surge ahead of tax credit expiration
GM explained in its regulatory filing that it had committed substantial funds to keep its lineup compliant with tightening environmental and fuel economy regulations. However, with the U.S. government having rolled back certain EV purchase incentives and relaxed emissions rules, it now expects EV adoption to grow more slowly and has begun reassessing its manufacturing capacity.
The automaker has remained steadfast in its commitment to electrification. Still, like other EV makers, it has been jolted by the removal of key tax incentives, particularly the elimination of the $7,500 tax credit, as well as federal rollbacks targeting vehicle emissions.
In the third quarter, the firm’s electric vehicle sales jumped more than twofold year-over-year, largely due to buyers racing to take advantage of expiring tax incentives. However, analysts warn sales could drop steeply in the coming months.
The company was among the first to commit billions to EVs. At one point, the company’s plan included $30 billion in spending by the end of this year for dozens of new models and increased battery production capacity.
But the company’s grand ambitions have hit a brick wall. GM, a leader among automakers in advocating for electrification, has increasingly lobbied against federal emissions and fuel-economy mandates that fostered consumer appetite for cleaner vehicles.
Several firms, faced with softening EV sales and a Trump administration hostile to green-energy initiatives, have called for lighter regulations. However, none has reversed course as swiftly or dramatically as GM.
Ford announced $1.9 billion in impairment costs in 2024
Earlier this year, financial analyst John Murphy had warned that automakers that had heavily invested in EVs were at risk of taking large write-downs. He commented, “There’s a lot of tough decisions that are going to need to be made. Based on the study, I think we’re going to see multibillion-dollar write-downs that are flooding the headlines for the next few years.”
Aside from GM’s EV-related impairments, last year, Ford disclosed a $1.9 billion cost associated with its electric vehicle investments. Ford’s EV-related charges totaled approximately $400 million for manufacturing asset impairments and up to $1.5 billion in other costs, including the cancellation of a nearly completed electric three-row SUV and the delay of its next-generation electric full-size truck.
Still, GM, which has the broadest variety of electric vehicles in the U.S., has made significant strides in sales this year. By Motor Intelligence’s count, GM’s share of all-electric vehicles expanded from 8.7% at the start of the year to 13.8% through Q3, surpassing Hyundai and Kia at 8.6%. But it trails Tesla, which had about 43.1% as of September.
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