General Motors now expects a $1.6 billion charge in the third quarter following a slowdown in demand for electric vehicles (EVs), according to a warning issued by the automaker on Tuesday. This substantial charge emerges as the company restructures its operations, and is grounded in a "strategic realignment of our EV capacity and manufacturing footprint to consumer demand," as stated in a recent regulatory filing by GM. This includes costs related to contract cancellations and other EV specific investments.
GM also cautioned that there might be “additional future material cash and non-cash charges that may adversely impact our operating results and cash flows in the period they are acknowledged.” Earnings reports are expected from the carmaker next week.
This warning by GM may reflect negatively on the American electric vehicle industry overall, as the problems affecting GM could potentially affect other automakers. The manufacturer attributed the downturn in sales to the Trump administration's removal of EV tax credits and changes in emissions standards. However, it's likely that a rush by consumers to utilise these credits before their expiration would have increased GM's sales in the third quarter.
Recently, GM shares rose by 2%, bouncing back from earlier losses and exhibiting a 7% rise in 2025 when compared to the S&P 500's 13% rise.