GM is taking a $1.6 billion hit after rolling back its EV plans

GM CEO Mary Barra set out ambitious plans for the company’s EV expansion in 2021.

Dia Dipasupil/Getty Images

GM is taking $1.6 billion in charges as it rolls back its ambitious EV plans.
The Detroit automaker said it expects electric vehicle adoption to slow as Trump scraps subsidies.
In 2021, CEO Mary Barra said GM would be all-electric by 2035, but now the company is returning to gas and hybrid cars.

GM is taking a big hit over its EV strategy shift.

The Detroit automaker said in a regulatory filing on Tuesday that it is taking $1.6 billion in charges as it adjusts its EV strategy amid expectations that demand is about to slow.

In 2021, CEO Mary Barra set out ambitious plans for GM to be electric-only by 2035. Four years later, the Chevrolet owner is joining many of its rivals in rolling back its EV plans and investing in hybrids and gas-powered vehicles.

In the regulatory filing, GM said it expects the adoption rate of electric vehicles to slow in the US due to the scrapping of the $7,500 tax credit and the Trump administration’s loosening of clean air regulations.

The company previously announced a $4 billion investment plan that will see it boost production of gas-powered SUVs and trucks in the US.

The charges, which GM expects to be recognized this quarter, include $1.2 billion stemming from adjustments in the company’s EV capacity and $400 million in cancellation fees and settlements.

GM’s share price was down nearly 2% premarket on the news.

Other automakers have also announced changes to their EV strategies as the Trump administration rolls back support for electric vehicles.

Honda, Jeep, and Ram have all scrapped current or planned US models in recent months, and Porsche forecast a €1.8 billion, or $2.2 billion hit last month after it announced plans to pivot back to hybrids and gas-powered vehicles.

GM’s crosstown rival, Ford, which has lost billions of dollars on its own EV operations, unveiled a major bet on affordable electric vehicles in August.

The Mach-E maker said it had redesigned its assembly line to produce EVs that could compete with Tesla and BYD, and teased a $30,000 electric truck coming in 2027.

Despite scaling back its EV plans, GM is also betting on cheaper electric models. The automaker unveiled the revamped Chevrolet Bolt last week, which it said would cost less than $30,000.

Read the original article on Business Insider

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