Power the Future founder Daniel Turner discusses the Trump administration suing California over truck emissions standards and EV mandates on The Bottom Line.
General Motors It said Tuesday it planned to take a $1.6 billion charge in the third quarter as it revamped its electric vehicle strategy as the expiration of the federal government’s EV tax credit is expected to slow demand.
GM’s move comes as automakers are reworking their EV production plans after slowing consumer demand over the past two years.
Trump administration’s move to eliminate the $7,500 federal tax credit for evThat helped support the emerging industry, prompting officials to warn about a decline in consumer demand.
GM said in a filing that it expects “the rate of EV adoption to slow” after recent policy changes, which include not only the end of tax incentives but also a move to roll back emissions regulations, which is expected to spur automakers to make more EVs.
Newsom says GM Mary Barra ‘sold us out’ on electric vehicle policies and federal subsidies
General Motors said it will take a $1.6 billion charge after the loss of federal EV tax credits. (Paul Hennessy/SOPA Images/LightRocket via Getty Images/Getty Images)
The automaker told Reuters the charge was “a special item driven by our expectation that EV volumes will be lower than planned due to market conditions and the changed regulatory and policy environment.”
Garrett Nelson, a senior equity analyst at CFRA Research, said the allegation is “not surprising given recent market developments and the fact that GM has probably made the most aggressive EV push of any traditional automaker.”
“We think automakers that have chosen to invest more heavily in hybrid vehicle development, like Toyota and Honda, are poised to benefit in the U.S. auto market,” Nelson said.
| anchor | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | General Motors Company | 55.62 | +0.27 |
+0.49% |
GM’s profit declines despite strong sales
Trump administration’s Tariffs and trade policy changes have also created financial hurdles for automakers like GM, which lost $1.1 billion last quarter.
GM estimates it will have a $4 billion to $5 billion bottom line impact this year Tariff headwindsAnd said that he can take steps to compensate at least 30% impact.
These include $1.2 billion of non-cash impairment and contract cancellation charges related to EV capacity adjustments and $400 million in commercial dispositions.
GM CEO Mary Barra has warned about the impact of tariffs and the removal of EV credits. (Anna Moneymaker/Getty Images/Getty Images)
California EV drivers are about to lose a big profit after 25 years
GM said the charges will be recorded as an adjustment to third-quarter non-GAAP results, which are scheduled to be released early next week.
GM shares rose 0.68% during the morning trading session on Tuesday following the news.
Get Fox Business by clicking here
Reuters contributed to this report.
