GM says it will suffer a loss of $1.6 billion as electric vehicle sales decline

The growing demand for electric vehicles is starting to impact automakers. In recent years, automakers have made big investments, betting that electric vehicles will become more widespread as well as meet government regulations, but recent policy shifts have now made those bets costly.

General Motors is the latest company to show the impact of this change on its bottom line. Today, the company said Deposit With the US Securities and Exchange Commission (SEC), it will take a loss of $1.6 billion from its quarterly earnings ending September 30. These charges stem mostly from impairments in the value of its plant and equipment associated with its electric vehicle operations along with $400 million in fees and settlements related to the cancellation of supplier contracts associated with its electric vehicle investments.

“Following recent U.S. government policy changes, including ending some tax incentives for consumers to purchase electric vehicles and reducing the stringency of emissions regulations, we expect the rate of EV adoption to slow,” the company said.

US demand for electric vehicles actually began to decline early last year, but is now expected to actually decline under President Donald Trump’s policies targeting the market. The biggest blow is the end of the $7,500 federal tax credit, which officially expired on September 30. This incentive was eliminated under the administration’s One Big Beautiful Bill Act.

But the loss of subsidies is not the only obstacle for the industry. Earlier this year, Trump rolled back federal emissions standards and stripped states of the ability to set their own stricter rules. The move eliminated requirements in California and other states that automakers sell more zero-emission vehicles.

The electric vehicle industry also faces cultural and consumer challenges. Elon Musk’s growing unpopularity That has turned away some buyers, which could lead to lower demand not just for Tesla vehicles but for electric vehicles in general.

GM said “a re-evaluation of our electric vehicle capabilities and manufacturing footprint” is ongoing and could result in more costs in the future.

GM isn’t the only company bracing for an electric vehicle slowdown. Car companies like Nissan, Honda and Ford are changing their strategies, delaying launches and quietly putting money back into internal combustion vehicles.

Just weeks ago, Ford CEO Jim Farley said at the Ford Pro Accelerate conference in Detroit Electric vehicle sales in the United States could be cut in half In the foreseeable future.

“I wouldn’t be surprised if electric vehicle sales in the U.S. drop to 5%,” Farley told the audience, according to Bloomberg. Electric vehicles currently represent approximately 10% of the broader domestic market.

For his part, Farley believes the industry should move toward “partial electrification” with more hybrid options. In his view, all-electric models make the most sense as short-drive passenger vehicles, where they represent only about 5% to 7% of the market. Ford is already looking to retool its battery and electric vehicle plants to include hybrid production, he said.