GM to Take $7.1B Charge in Q4 Amid EV Cutbacks and China Restructuring

• Of the $7.1 billion total, approximately $6 billion relates to EV impairments including $1.8 billion non-cash charges and $4.2 billion for supplier settlements and contract cancellations that will impact cash flow when paid
• GM expects additional material charges in 2026 related to supply base negotiations, though significantly less than 2025's impairments, and may face further charges due to proposed Trump administration changes to emissions credit regulations
• The charges will impact net income but not adjusted results and come after GM was among the first automakers to invest billions in EVs; the company will report Q4 results on January 27

GM to Take $7.1B Charge in Q4 Amid EV Cutbacks and China Restructuring

General Motors announced it will record $7.1 billion in special fourth-quarter charges related to electric vehicle pullbacks and China operations restructuring. The charges break down to approximately $6 billion in EV-related writedowns due to weakening demand and $1.1 billion for its China business overhaul, including $500 million in cash.

Key Financial Details:

• The charges will impact net income but not adjusted earnings
• EV impairments include $1.8 billion in non-cash charges
• $4.2 billion relates to supplier settlements, contract cancellations, and other costs with cash impact
• Additional material charges expected in 2026, though at lower levels than 2025
• GM initially took a charge in Q3 after reevaluating EV plans in October

Market Context:

The announcement follows similar action by Ford, which reported writedowns in December due to a broad U.S. EV market reset driven by weakening consumer demand and Trump administration policy changes. The EV segment has experienced a sales slump after the administration ended tax credits for EV buyers in September.

GM was among the first automakers to invest billions in EVs, once planning massive investments for dozens of new models and battery production capacity. CFO Paul Jacobson emphasized the company still believes in EVs' future but needs structural changes to reduce production costs.

Additional Risks:

GM may face further charges related to emissions credits due to proposed Trump administration regulatory changes to corporate average fuel economy standards.

GM will report full Q4 results on January 27. Despite these challenges, GM stock gained over 50% in 2025, leading major publicly traded automakers.