Automotive News: GMs push for all EVs comes back to bite them in the posterior

The sharp sting of waning government support for electric vehicles—and the industry’s sluggish adoption—came into stark relief on Tuesday as General Motors announced a $1.6 billion hit from scaling back its ambitious EV production plans.

The Detroit powerhouse was an early EV trailblazer, vowing in 2021 to phase out gasoline and diesel vehicles worldwide by 2035—a pledge made just after President Joe Biden assumed office with bold promises to supercharge EV sales. GM had earmarked up to $30 billion for the shift by this year, envisioning a fully electric future.

But the landscape has shifted dramatically. Last month, President Donald Trump axed federal tax credits that had made pricey American-made EVs more accessible to buyers. Meanwhile, Chinese automakers have staged a lightning-fast global takeover, churning out roughly 70% of the world’s EVs this year.

Of the charges, GM attributed about $1.2 billion to recalibrating its EV manufacturing capacity, noting that broader efforts to reshape its production footprint remain underway. That leaves open the “reasonably possible” prospect of additional costs ahead. The remaining $400 million stems from scrapped contracts and settlements tied to its EV bets. Shares dipped 1.6% in premarket trading.

“Following recent U.S. government policy changes—including the end of certain consumer tax incentives for EV purchases and looser emissions standards—we anticipate a slowdown in EV adoption rates,” GM stated in its filing.

The company signaled trouble last month, too, when it dialed back Chevrolet Bolt production and trimmed output for the Cadillac Lyriq and Vistiq, citing “strategic adjustments” to match tempered industry growth and buyer demand.