GM to take a $1.6 billion hit as tax incentives for EVs are slashed and
emission rules ease
[October 15, 2025] By
MICHELLE CHAPMAN
General Motors will record a negative impact of $1.6 billion in its next
quarter after tax incentives for electric vehicles were slashed by the
U.S. and rules governing emissions are relaxed.
Shares fell less than 2% before the opening bell Tuesday.
The EV tax credit ended last month. The clean vehicle tax credit was
worth $7,500 for new EVs and up to $4,000 for used ones.
Meanwhile, the Environmental Protection Agency has been working on
easing rules aimed at cleaning up auto tailpipe emissions as the Trump
administration move to undo incentives for automakers to go electric.
President Donald Trump has also challenged federal EV charging
infrastructure money and blocked California’s ban of new gas-powered
vehicle sales. It adds up to less pressure on automakers to continue
evolving their production away from gas-burning vehicles.
General Motors, which had led the way among U.S. automakers with plans
to convert production to an electric fleet of vehicles, said in a
regulatory filing on Tuesday that it will have to book charges that
include non-cash impairment and other charges of $1.2 billion due to EV
capacity adjustments. There's also $400 million in charges mostly
related to contract cancellation fees and commercial settlements
associated with EV-related investments.
GM warned that it may take additional hits as it adjusts production,
with non-cash charges potentially impacting operations and cash flow in
the future.
The company said that its EV capacity realignment doesn't impact its
retail portfolio of Chevrolet, GMC and Cadillac EVs currently in
production, and that it expects those models to remain available to
consumers.
EVs were considered to be the future of the US automotive industry. GM
had announced in 2020 that it was going to invest $27 billion in
electric and autonomous vehicles in the next five years, a 35% increase
over plans made before the pandemic.
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The company logo shines off the nose of an unsold 2022 Bolt electric
vehicle on display in front of a Chevrolet dealership Sunday, Sept.
12, 2021, in Englewood, Colo. (AP Photo/David Zalubowski, File)
 In 2021 GM said that it planned to
have more than half of its North American and China factories be
capable of making electric vehicles by 2030. It also pledged at the
time to increase its investment in EV charging networks by nearly
$750 million through 2025.
A year later, GM CEO Mary Barra said that the automaker would sell
more electric vehicles in the U.S. than Tesla by the middle of the
decade. GM also had a goal of making the vast majority of the
vehicles it produces electric by 2035, and the entire company carbon
neutral, including operations, five years after that.
Yet U.S. automakers are being hampered in some of their long-term
planning, with drastic changes in economic and environmental policy
from one administration to the next. The automakers are also facing
increased competition from automakers such as China's BYD, which
announced in July that its sales grew 31% in the first six months of
the year to 2.1 million cars.
BYD’s sales have skyrocketed on the back of a government-driven EV
boom in China. The rise of BYD and other Chinese electric vehicle
makers is a challenge for Tesla and the world’s other major
automakers as Chinese competitors push into Europe, Southeast Asia
and other overseas markets with a relatively affordable option for
drivers who want to go green.
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