GM Scales Back EV Business, Takes $6 Billion Impairment Charge

Hit by weak U.S. electric vehicle (EV) demand and policy shifts, General Motors (GM) announced on January 8 that it would record a $6 billion impairment charge to terminate certain EV investment projects. Of this amount, $4.2 billion represents cash expenditures, primarily for compensating suppliers due to contract terminations. Despite scaling back production capacity, GM emphasized that its more than ten currently available EV models will remain on the market. The impairment charge will be reflected in its fourth-quarter 2025 financial results, with additional, albeit smaller, charges possible in 2026. On the same day, GM also disclosed an additional $1.1 billion impairment related to the restructuring of its Chinese joint ventures. Following the announcement, GM’s after-hours share price fell by 2%. Previously, Ford had recorded a similar impairment charge of $19.5 billion. Analysts noted that GM’s insufficient presence in the hybrid segment could negatively impact its market share. U.S. EV sales growth is projected to plummet to just 1.2% in 2025, with market penetration expected to decline to 6% in 2026.