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Automakers like General Motors (GM) and Ford Motor are scaling back their production of electric vehicles due to weak consumer demand.
General Motors announced on Thursday that it would record a $6 billion charge for pulling back from its electric vehicle investments. Weeks ago, Ford Motor also revealed an even larger $19.5 billion charge for canceling multiple EV programs.
Are automakers losing interest in EVs?
General Motors has joined the list of major automakers retreating from EVs, following policy changes under the Trump administration and weakening consumer demand.
$4.2 billion in cash from GM’s charge is from contract cancellations and settlements with suppliers who had increased their production capacity, expecting significantly higher EV production volumes.
The company stated in its regulatory filing that the writedown is due to a reduction in its planned EV production and the impact of that on its planned supply chain. The company expects to record additional charges in 2026 as supplier negotiations continue.
The company added that its current U.S. lineup of approximately a dozen electric models would remain available to consumers.
GM closed the regular session up 3.9% at $85.13, but in after-hours trading following the announcement, the shares fell by 2%. The company also announced a separate $1.1 billion charge for restructuring its China joint venture operations.
The dramatic change in EV strategy is due to President Donald Trump eliminating the $7,500 federal tax credit for EV buyers on September 30, 2025. GM’s electric vehicle deliveries plummeted 43% in the fourth quarter after the credit disappeared, despite reaching record highs in the prior three months as customers rushed to purchase before the deadline.
According to Reuters, citing research firm Omdia, EV sales increased just 1.2% in 2025 compared to the previous year. Automotive data provider Edmunds projects that EVs will account for only 6% of overall U.S. vehicle sales in 2026, down from 7.4% in 2025.
Does GM still sell electric vehicles?
General Motors previously pledged to completely replace internal-combustion vehicles with electric vehicles by 2035, and while the company hasn’t officially abandoned that target, analysts have dramatically reduced EV sales forecasts for the next decade in the U.S. market, which is GM’s largest and most profitable territory.
The company’s CEO, Mary Barra, has stated that the company will respond to customer demand rather than follow rigid timelines. GM has been scaling back its EV investments since 2024, including a $1.6 billion charge in the third quarter of 2025.
GM has halted battery production at two joint-venture plants for six months and reduced an EV-only Detroit factory to single-shift operations. The company also redirected a planned Michigan EV factory to instead produce the Cadillac Escalade and full-size pickups.
Thanks to strong sales of its gas-powered large pickups and SUVs alongside its existing EV offerings, GM gained some U.S. market share in 2025. However, CFRA equity analyst Garrett Nelson warned that “GM’s lack of hybrid exposure could partially reverse recent market share gains.”
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