Updated Jan. 8, 2026, 6:04 p.m. ET
- GM made numerous production changes last year to cope with a smaller-than-anticipated EV market.
- Combined with an October 2025 filing, GM will have accounted for $7.6B in costs related to downshifting EV production in 2025.
General Motors is taking on $6 billion in costs for unused electric vehicle investment, according to a government filing, related to the production changes the automaker made last year. Additionally, the Detroit automaker said Jan. 8 that it will also face a $1.1 billion charge from restructuring its China business.
GM will record a total of $7.1 billion in the special charges in its fourth quarter results expected to be announced Jan. 27. The charges will impact GM’s net earnings, but not its adjusted earnings before interest and taxes.
This is the second charge associated with electric vehicle production changes that GM will account for in 2025. The latest announcement comes after the automaker said Oct. 14 that unused equipment destined for EV production of $1.2 billion and $400 million in cancelled supplier contracts would impact their third-quarter earnings results. Combined with the recent filing, GM will have accounted for a $7.6 billion loss on downshifting its EV production in 2025.
GM said in the 8-K filed after the stock market closed with the U.S. Securities and Exchange Commission that the charges do not carry any operational or vehicle production changes not previously announced.
“With the termination of certain consumer tax incentives and the reduction in the stringency of emissions regulations, industry-wide consumer demand for EVs in North America began to slow in 2025. As a result, GM proactively reduced EV capacity,” GM said in the filing.
Some of those changes include pivoting GM’s Orion facility, previously slated for EV production, to assemble the Cadillac Escalade, the Chevrolet Silverado and GMC Sierra light-duty pickups and reducing battery cell production capacity by selling interest in the joint-venture Ultium Cells facility to LG Energy Solutions.
GM made numerous production changes last year to cope with a smaller-than-anticipated EV market. GM slashed shifts and laid off hundreds of workers at its electric vehicle plant, Factory Zero, in Detroit-Hamtramck who were on layoff for much of the year.
GM’s production adjustments allow the automaker to dial back, or dial up, EV production depending on demand, the company has said, while it faces an uncertain EV market. GM reported fourth-quarter 2025 sales ― the first since the expiration of the federal tax credit ― on Jan. 5, noting that EV sales fell 43% year-over-year to 25,219 vehicles after reaching record heights earlier that year.
The charges break down to $1.8 billion in unused EV equipment and approximately $4.2 billion in supplier commercial settlements, contract cancellation fees, and other charges. GM added that further cost could be recorded in 2026 from continued negotiations with its supply base but said that won’t be as costly as the EV-related charges it incurred last year.
GM is not the only Detroit automaker changing direction because of EV production reductions.
Ford Motor Co. said Dec. 15 that it’s changing its business model, a move that will cost it $19.5 billion to focus on building more hybrid and gasoline models. Many analysts anticipate more automakers beyond GM and Ford will do the same.
GM also added in the filing that proposed regulatory changes to greenhouse gas emission standards may impact the company’s emissions credits, which could further hit profits later on this year.
President Donald Trump proposed on Dec. 3 drastically scaling back the strict mile-per-gallon standards for new cars and light-duty trucks put in place by former President Joe Biden.
(This story has been updated to include new information.)
Jamie L. LaReau and Todd Spangler contributed to this report.
Jackie Charniga covers General Motors for the Free Press. Reach her at jcharniga@freepress.com.
