General Motors Plunges 2.58% Amid $6 Billion EV Charge Fallout: What’s Brewing in the Auto Sector?

Summary
• General Motors (GM) slumps 2.58% to $82.94, its lowest since 2021, amid a $6 billion charge tied to EV strategy reversal.
• The stock trades between $81.00 and $84.41, with a 52-week range of $41.60–$85.18 and a dynamic PE of 8.91.
• Tesla (TSLA) surges 2.04% as the EV sector grapples with policy shifts and demand volatility.

General Motors faces a seismic shift as a $6 billion charge—linked to waning EV demand and expiring tax incentives—drives a sharp intraday decline. The stock’s 2.58% drop reflects broader sector uncertainty, with Tesla’s resilience underscoring divergent strategies. Traders now weigh technical signals and options volatility to navigate the fallout.

EV Policy Whiplash and $6 Billion Charge Trigger GM’s Sharp Decline
General Motors’ 2.58% intraday plunge stems from a $6 billion charge announced in its SEC filing, driven by declining EV sales and the expiration of U.S. tax incentives. The company cited $1.8 billion in non-cash impairments and $4.2 billion in supplier settlements, contract cancellations, and restructuring costs. This follows a $1.6 billion charge in the prior quarter, reflecting a $7.6 billion total hit as EV adoption slows. The move underscores the sector’s vulnerability to policy shifts, with the Trump administration’s relaxed emissions standards and the end of the $7,500 EV tax credit compounding challenges. GM’s aggressive 2035 electrification goals now face scrutiny as it pivots production from EVs to internal combustion engines.

EV Sector Volatility Intensifies as Tesla Rises, GM Falls
While General Motors tumbles, Tesla (TSLA) gains 2.04%, highlighting divergent trajectories in the EV sector. Tesla’s resilience stems from its first-mover advantage, cost-competitive models, and a charging network that outpaces GM’s. Meanwhile, GM’s $6 billion charge mirrors Ford’s $19 billion hit, signaling a sector-wide recalibration. The 52-week high for GM at $85.18 contrasts with Tesla’s $314.67 peak, but both face headwinds as U.S. policy shifts and Chinese EV dominance (e.g., BYD’s 2.26 million units in 2025) reshape demand. Investors are now parsing whether GM’s pivot to ICE vehicles can offset EV losses or if the sector’s long-term growth narrative remains intact.

Options Playbook: Capitalizing on GM’s Volatility with Strategic Contracts
• MACD: 2.27 (bullish), Signal Line: 2.59 (neutral), Histogram: -0.31 (bearish divergence)
• RSI: 69.54 (overbought), Bollinger Bands: 84.35 (upper), 82.10 (middle), 79.85 (lower)
• 200D MA: $58.38 (far below current price), 30D MA: $79.55 (support zone)

GM’s technicals suggest a short-term bearish bias despite a long-term bullish trend. The stock is trading near its 30D support range (82.91–83.15) and faces resistance at the 200D MA. A 5% downside scenario to $78.79 could test the lower Bollinger Band. For options, two contracts stand out:

• GM20260116C82 (Call):
- Strike: $82.00, Expiry: 2026-01-16, IV: 27.31%, Leverage: 43.66%, Delta: 0.628, Theta: -0.297, Gamma: 0.113, Turnover: 351,635
- Payoff: $0.94 (5% downside to $78.79).
- This call offers high leverage and liquidity, ideal for a short-term bearish play as GM tests support.

• GM20260116C82.5 (Call):
- Strike: $82.50, Expiry: 2026-01-16, IV: 28.17%, Leverage: 50.28%, Delta: 0.568, Theta: -0.283, Gamma: 0.114, Turnover: 220,035
- Payoff: $0.44 (5% downside to $78.79).
- This contract balances moderate delta with high leverage, making it a strategic choice for volatility-driven traders.

Hook: If GM breaks below $81.00, the GM20260116C82.5 call offers a high-leverage bearish play. Aggressive bulls may consider the GM20260116C82 call into a bounce above $84.35.

Backtest general motors Stock Performance
General Motors (GM) has experienced a total of 461 intraday plunges of at least -3% since 2022. While the 3-day win rate is 52.28%, the 10-day win rate is 54.23%, and the 30-day win rate is 55.10%, indicating a higher probability of positive returns in the short term, the maximum return during the backtest period was only 4.36%, suggesting that even though GM has a good chance of bouncing back after a significant drop, the overall returns have been relatively modest.

Navigating GM’s Crossroads: Immediate Action Steps for Investors
General Motors’ 2.58% drop reflects a pivotal moment as EV policy shifts and sector competition intensify. While the stock’s long-term bullish trend (30D MA at $79.55) remains intact, short-term volatility hinges on support at $81.00 and resistance at $84.35. Tesla’s 2.04% gain underscores the sector’s divergent paths, with GM’s pivot to ICE vehicles adding uncertainty. Investors should monitor the 52-week low of $41.60 and potential policy changes under the Trump administration. For now, the GM20260116C82.5 call offers a high-leverage bearish play, while a rebound above $84.35 could reignite bullish momentum. Action: Watch for a breakdown below $81.00 or a policy reversal in EV incentives.