GM's EV Charges Balloon to $7.6 Billion as Market in US Craters

General Motors Co. announced Thursday it will record $7.6 billion in charges related to its electric vehicle and battery operations. The writedown includes $6 billion from changes in its EV strategy and $1.1 billion from China restructuring efforts. The charges will be reflected in its fourth-quarter earnings report.

The move comes amid a broader shift in the U.S. automotive industry. Sales of battery-powered vehicles have slowed, and automakers are adjusting their investments. Ford Motor Co., for instance, has taken a $19.5 billion charge as part of its own EV strategy pivot.

The Trump administration's policies have played a key role in the market downturn. Federal tax credits for EV buyers were eliminated, and fuel efficiency mandates were relaxed, reducing pressure on automakers to electrify their fleets.

Why Did This Happen?

The collapse of the U.S. EV market has forced automakers to reassess their strategies. GM had previously committed to a $35 billion investment to produce a million EVs per year by 2025. However, sales last year reached just 170,000 units, far below expectations.

The Trump administration's tax and spending bill removed a $7,500 federal tax credit for EV buyers, further dampening demand. Additional regulatory changes, such as weaker fuel efficiency requirements, also contributed to the shift away from electrification.

GM's financial pain is not isolated. Ford, for instance, has canceled the electric version of its F-150 Lightning and repurposed an EV battery plant. These moves reflect broader industry concerns about profitability and demand.

How Did Markets React?

Despite the large writedown, GM's stock closed the day up almost 4%. The company has gained over 50% in 2025, outperforming its peers. Analysts say the charges, while significant, are expected to improve earnings clarity by separating core business results from one-time costs.

The market has also responded to Ford's $19.5 billion charge. Ford's stock has risen 47% in the last year, with analysts citing a stronger focus on hybrids and gas-powered vehicles as a positive shift.

What Are Analysts Watching Next?

Analysts are now watching how automakers adapt to a more uncertain EV market.

GM expects to take additional charges in 2026, though they will be smaller than 2025's $7.6 billion hit. The company is also restructuring its China joint venture, with $1.1 billion in related costs.

Investors are looking for signs of profitability in EVs. Ford and GM are both shifting toward more affordable models and hybrid vehicles. Ford plans a $30,000 electric pickup in 2027, while GM is developing an AI assistant and eyes-off driving tech for its electric Cadillac Escalade.

The battery materials market, however, is expected to grow. Forecasts suggest global demand for battery components will reach $216.8 billion by 2035, driven by grid storage and EVs outside the U.S.

As the EV market reshapes, GM and Ford's strategic moves could determine their long-term competitiveness. Both companies are reorienting toward cost efficiency and consumer demand, with the hope of achieving profitability in a more realistic market environment.