GM is suddenly shaking up electric vehicle production plans after issuing a stark warning. The automaker warned that new US policy changes, including killing off the $7,500 EV tax credit, will cost it at least $1.6 billion.
GM shifts plans as the EV tax credit expires
Although GM set another record by delivering 66,501 electric vehicles in the third quarter, it’s bracing for a much different market over the next few months.
In an SEC filing on Tuesday, GM said that “following recent US Government changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow.”
Although it didn’t reveal specifics, GM said the policy changes “have caused us to reassess our EV capacity and manufacturing footprint.”
The changes do not impact Chevy, GMC, and Cadillac electric vehicles currently in production, and GM expects they will remain available for buyers.
The “strategic realignment” will cost it at least $1.6 billion. GM said $1.2 billion of the charges will be non-cash as it adjusts EV capacity. The other $400 million is primarily due to contract cancellation fees and “commercial settlements associated with EV-related investments,” according to GM’s filing. That will have a cash impact.
GM is also reassessing investments in battery manufacturing. The company said discussions are still ongoing, adding that it’s “reasonably possible” it will absorb additional costs due to the changes.
The charges, which were approved by the board on October 7, will be included in GM’s third-quarter earnings. We will learn more when GM reports Q3 earnings results next week on October 21.
Although GM and crosstown rival Ford were planning to launch programs designed to extend the $7,500 EV credit, both have since abandoned those plans. Instead, GM will provide about $6,000 of its own cash for a limited time to support EV leasing.
Electrek’s Take
Through the first nine months of 2025, GM sold 144,688 EVs, more than double the amount it sold in the same period last year.
The Chevy Equinox EV has been GM’s biggest hit, ranking as the third best-selling EV behind the Tesla Model Y and Model 3. Cadillac was the leading EV luxury brand in Q3 with three of the top 10 most popular models in the segment: the Lyriq (#2), Optiq (#5), and Vistiq (#6).
GMC is on pace for its best year ever, with the new Sierra EV rolling out and demand for the Hummer EV picking up. With the $7,500 EV tax credit now expired, GM, like most automakers, is preparing for slower EV adoption in the US.
The policy changes, including dropping the $7,500 tax credit, will only put the US further behind China, South Korea, and others leading the global push for electric vehicles.
We should learn more about GM’s updated EV production plans next week when it reports Q3 earnings on October 21. Check back for updates.
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