GM Sees $7.1 Bln Charges In Q4 On EV Pullback, China JV Restructuring

(RTTNews) - General Motors has announced that its fourth-quarter results will reflect around $7.1 billion charges, mainly related to its pullback from electric vehicles or EVs amid the changes in U.S. policies, as well as restructuring costs related to China joint venture.

The company expects to record charges of around $6.0 billion primarily in GM North America or GMNA primarily due to changes in EV strategies. Additionally, the automaker will incur around $1.1 billion in non-EV related charges, largely from the previously announced restructuring of its joint venture with SAIC in China.

Going ahead, the company said it expects to recognize additional material cash and non-cash charges in 2026 related to ongoing commercial negotiations with its supplier base, though these are expected to be significantly less than the EV-related charges seen in 2025.

In pre-market activity, GM shares were losing around 1.1% to trade at $84.20.

The automajor noted that the charges are attributed to various factors, including reduced production amid slowing consumer demand for EVs in North America, the termination of certain consumer tax incentives, and a reduction in the stringency of emissions regulations.

In the recent years, GM has been investing significant capital, along with other major automakers, to develop EVs to meet increasingly stringent fuel economy and emissions regulations in the U.S. as well as growing customer demand.

GM added EV production to existing assembly plants and developed an EV architecture and propulsion strategy in order to deliver EVs quickly and cost effectively, on the way becoming the #2 seller of EVs in North America beginning in the second half of 2024.

Meanwhile, following a broader reassessment due to weak demand in 2025 along with changing U.S. Government policies, GM said it proactively reduced EV production capacity. The Company's assembly plant in Orion, MI has been shifted from EV production to the production of full-size SUVs and full-size pickups powered by internal combustion engines, in order to meet the unmet demand in that area. The firm also reduced battery cell capacity, including by selling its interest in Ultium Cells LLC's Lansing, MI facility to LG Energy Solution.

The expected EV charges in the fourth quarter 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.

The company already recorded charges of $1.6 billion in GMNA in the third quarter.

In addition, the expected around $1.1 billion additional non-EV related charges mainly relate to the previously announced restructuring of China joint venture, SAIC General Motors Corporate Limited or SGM, primarily related to proportionate share of supplier claims, and an additional legal accrual. The non-EV related charges will have an around $0.5 billion cash impact when paid.