GM sees additional $6B in charges related to review of EV capacity, investments

In a regulatory filing, General Motors (GM) stated: “For the past several years, the global automotive industry and General Motors Company have been investing significant capital to develop electric vehicles to meet increasingly stringent fuel economy and emissions regulations in the United States and growing customer demand. Our strategy in North America has been focused on delivering exceptional vehicles quickly and cost effectively. To realize economies of scale, GM added EV production to existing assembly plants and developed a dedicated EV architecture and propulsion strategy. These initiatives helped the Company become the #2 seller of EVs in North America beginning in the second half of 2024 on the strength of our broad portfolio of award-winning electric SUVs, trucks and luxury vehicles. 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, including by pivoting the Company’s assembly plant in Orion, MI from EV production to the production of full-size SUVs and full-size pickups powered by internal combustion engines, where we believe we have unmet demand, and we proactively reduced battery cell capacity, including by selling our interest in Ultium Cells LLC’s Lansing, MI facility to LG Energy Solution. In October 2025, GM announced a broader reassessment of its EV capacity and manufacturing footprint to align with expected consumer demand and U.S. Government policy changes and recorded charges of $1.6 billion in GM North America in the three months ended September 30, 2025. Our review of EV capacity and investments continued throughout the fourth quarter and, as a result, we expect to record charges of approximately $6.0 billion in the three months ended December 31, 2025, primarily in GMNA. These charges include non-cash impairments and other non-cash charges of approximately $1.8 billion as well as supplier commercial settlements, contract cancellation fees, and other charges of approximately $4.2 billion, which will have a cash impact when paid. We expect to recognize additional material cash and non-cash charges in 2026 related to continued commercial negotiations with our supply base, which we believe will be significantly less than the EV-related charges incurred in 2025. In addition, proposed regulatory changes to the greenhouse gas emission standards could result in an impairment of our emissions credits, similar to the previous impairment we recognized related to our CAFE credits. Such charges may adversely affect our results of operations and cash flows in the period in which they are recognized. As previously disclosed, our strategic realignment of EV capacity does not impact today’s retail portfolio of Chevrolet, GMC, and Cadillac EVs in production, and we plan to continue to make these models available to consumers. We also expect to record additional non-EV related charges of approximately $1.1 billion for the three months ended December 31, 2025 that will have an approximately $0.5 billion cash impact when paid. These charges mainly relate to (i) the previously announced restructuring of our China joint venture, SAIC General Motors Corporate Limited (SGM), primarily related to our proportionate share of supplier claims, and (ii) an additional legal accrual. The EV-related charges, the China restructuring charges, the legal accrual and certain other insignificant charges expected to be recognized in the three months ended December 31, 2025 will be reflected as adjustments in our non-GAAP financial measures.”