General Motors' ambitious electric vehicle strategy has hit a financial wall. The Detroit automaker disclosed Thursday that it will record approximately $6 billion in charges during its fourth quarter of 2025, stemming from its decision to scale back electric car production and cancel certain EV programs. The announcement sent GM shares sliding nearly 3% on Friday.

This latest write-down follows a $1.6 billion charge taken in the third quarter for the same reasons, bringing GM's total EV-related losses in 2025 to a staggering $7.6 billion. The scale of the retreat underscores just how dramatically the American EV market has shifted since the elimination of federal tax incentives last fall.

What's Driving the Massive Write-Down

The charges break down into two main categories. GM said approximately $1.8 billion will come from non-cash asset impairments and related accounting adjustments. The remaining $4.2 billion represents actual cash outlays for supplier settlements, contract cancellation fees, and other costs associated with unwinding EV commitments.

The financial pain reflects a broader industry reckoning. When the Trump administration ended the $7,500 federal EV tax credit in September 2025, it removed a key purchase incentive that had been propping up consumer demand. The used EV tax credit of up to $4,000 was eliminated simultaneously. Without these subsidies, sticker prices on many electric vehicles suddenly looked less competitive against their gasoline counterparts.

"The costs come as the automaker reduced EV capacity and battery production and pivoted some EV plants to produce gas-powered SUVs and trucks in the future."

- GM regulatory filing

A Strategic Pivot Back to Gas-Powered Vehicles

GM's response has been to retool facilities originally slated for EV production to instead manufacture traditional internal combustion vehicles. The company is betting that American consumers, faced with higher upfront costs for EVs and an underdeveloped charging infrastructure, will continue favoring gasoline-powered trucks and SUVs that have historically been GM's profit engine.

The pivot is not without irony. Just three years ago, GM had pledged to go all-electric by 2035 and invested billions in its Ultium battery platform. CEO Mary Barra had positioned the company as a leader in the electric transition, competing directly with Tesla for market share.

Industry-Wide Retreat

GM is not alone in pulling back. Ford has delayed several EV programs and reduced production targets. Stellantis has slowed its Jeep electrification timeline. Even Tesla, which dominated American EV sales for years, has seen its market share erode as overall demand growth has stalled.

The softening coincides with the relaxation of federal emissions standards under the current administration. Without regulatory pressure to hit electrification targets, automakers have more flexibility to prioritize profitable vehicles over compliance-driven EVs that may lose money on every unit sold.

What It Means for Investors

For GM shareholders, the charges will weigh heavily on fourth-quarter results. However, the company suggested the worst may be behind it. In its SEC filing, GM indicated it expects additional EV-related charges in 2026 but believes they "will be significantly less than the EV-related charges incurred in 2025."

That cautious optimism reflects a belief that once the restructuring is complete, GM can return to a more stable operating model focused on vehicles consumers are actually buying. Trucks and SUVs like the Silverado, Tahoe, and Yukon remain in strong demand and carry some of the highest profit margins in the industry.

Looking Ahead

The EV pullback doesn't mean GM is abandoning electric vehicles entirely. The company continues to sell the Chevrolet Equinox EV and Blazer EV, and the electric Silverado pickup remains in production. But the pace of electrification has slowed dramatically, with GM now taking a more measured approach that prioritizes profitability over market share.

For investors weighing GM stock, the key question is whether the company can successfully execute its pivot without losing too much ground to competitors who may be better positioned when EV demand eventually rebounds. With gas prices at multi-year lows and no clear timeline for tax credit restoration, that rebound may be further away than anyone expected.

The Bottom Line

GM's $7.6 billion in 2025 EV write-downs represent one of the largest single-year charges in the company's history for a strategic initiative. While painful, the move gives management flexibility to redirect capital toward products that generate actual profits. Whether that proves to be the right long-term bet depends entirely on how quickly the American auto market evolves and whether government policy shifts to favor EVs once again.