GM is Taking a Big Hit as EV Demand Drops

Emily Elconin / Bloomberg / Getty Images GM is expected to release its third-quarter results next week.

Key Takeaways

General Motors said it expects to take a $1.6 billion charge in the third quarter as it shakes up its electric vehicle operation because of falling demand. The "Big Three" automaker said it sees declining EV sales with the expiration of U.S. tax incentives.

General Motors' electric vehicle plans aren't playing out as it had hoped.

The "Big Three" automaker warned Tuesday that it now expects to take a $1.6 billion charge in the third quarter as the company shakes up operations because of falling demand for EVs.

GM (GM) wrote in a regulatory filing that the charge is based on a “strategic realignment of our EV capacity and manufacturing footprint to consumer demand,” along with the cancellation of contracts and other EV investments.

The company also warned it could have “additional future material cash and non-cash charges that may adversely affect our results of operations and cash flows in the period in which they are recognized.” The carmaker is scheduled to report earnings next week.

Why This Is Significant

GM's warning could be taken as an adverse signal for electric vehicle makers in the U.S. broadly, as the same headwinds that affect GM could weigh on other automakers.

GM said the Trump administration's elimination of EV tax credits and changes in emissions standards would depress sales, though a pull-forward in demand as buyers rushed to take advantage of credits before they expire likely boosted GM's sales in the third quarter, according to Cox Automotive, citing Kelley Blue Book estimates.

Shares of GM were up 2% in recent trading, rebounding from losses earlier in the session. They've added about 7% in 2025 so far, compared to a roughly 13% rise for the S&P 500.

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