General Motors takes $6bn writedown as EV market cools

General Motors (GM EV) announced on Thursday it will take a $6 billion charge to unwind certain electric vehicle investments, marking a major pullback in the U.S. automaker’s ambitious shift toward battery-powered vehicles. The writedown comes as federal incentives for EV buyers vanish and overall demand softens.

EV supply chain impact

Most of the charge, $4.2 billion, is linked to supplier contract cancellations and settlements, reflecting higher planned production volumes before market demand faltered. GM emphasized that its U.S. lineup of roughly a dozen battery-powered vehicles will remain available to consumers. “We plan to continue to make these models available,” the company said. Additional EV-related charges in 2026 are expected but will likely be smaller than 2025’s.

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Market reaction and strategic shifts

Shares fell 2% in after-hours trading but closed the regular session up 3.9% at $85.13. GM’s pullback mirrors a broader industry trend, with rival Ford EV announcing a $19.5 billion writedown last December. Ford canceled several EV programs, including a fully electric F-150 Lightning and additional electric trucks and vans.

Consumer incentives and sales decline

The shift follows the elimination of the $7,500 federal tax credit for EV buyers last September, which caused GM’s EV deliveries to drop. Industry-wide, EV sales increased only 1.2% in 2025, compared to faster growth in previous years. Automotive analysts expect EVs to account for about 6% of total U.S. vehicle sales in 2026, down from 7.4% in 2025.

Future outlook

Despite scaling back some EV projects, GM continues to advance its internal combustion lineup, particularly large pickups and SUVs, which drove U.S. market share gains in 2025. Analysts warn, however, that the lack of hybrid options could hinder future growth. GM has also halted EV battery production at two joint-venture plants for six months and shifted plans for a new Michigan factory to focus on conventional vehicles.

Industry Context

GM’s aggressive early bet on electrification positioned it behind Tesla (TSLA.O) in sales and made it a global leader in electric vehicle investments. Yet, regulatory changes and cooling consumer demand underscore the volatility in the EV market, raising questions about the pace of the U.S. transition to electric mobility.