Table of Contents
- The Electric Vehicle Sales Slowdown
- GM’s $1.6 Billion Financial Blow
- How the EV Tax Credit Repeal Changed Everything
- Why GM Can’t Turn a Profit on EVs
- GM’s Pivot: Fewer Models, Lower Costs
- Sources
The Electric Vehicle Sales Slowdown
Once hailed as the future of American auto manufacturing, electric vehicles (EVs) are hitting a rough patch — and General Motors is feeling the pain more than most. On Tuesday, October 14, 2025, GM announced it would take a staggering $1.6 billion hit to its earnings, largely due to plummeting EV demand and the resulting devaluation of factories, equipment, and related assets.
This marks a sharp reversal from just a few years ago, when automakers raced to electrify their fleets amid government incentives, climate commitments, and surging consumer interest.
GM’s $1.6 Billion Financial Blow
The electric vehicle losses break down as follows:
| Component | Amount | Description |
|---|---|---|
| Asset Write-Down | $1.2 billion | Reduced value of EV plants, tooling, and battery manufacturing infrastructure |
| Contract Cancellations | $400 million | Cash impact from terminating supplier agreements tied to EV production |
“The reassessment of our EV capacity and manufacturing footprint… is ongoing,” GM stated in an SEC filing, adding that further charges remain “reasonably possible.”
How the EV Tax Credit Repeal Changed Everything
A major catalyst for the sales collapse came on September 30, 2025, when Congress and President Trump eliminated the federal $7,500 tax credit for new EV purchases. The incentive had been a key driver of affordability for middle-class buyers.
Without it, many consumers balked at the premium price tags of electric trucks and SUVs — especially as gas prices stabilized and charging infrastructure remained uneven outside major metro areas.
Industry analysts say the policy shift caught automakers off guard. “GM, Ford, and others built their EV roadmaps assuming the credit would stay in place through 2030,” said Elena Ruiz, an auto sector analyst at Morgan Stanley. “Pulling it abruptly created a demand cliff.”
Why GM Can’t Turn a Profit on EVs
Despite years of investment, GM has yet to earn a profit on any of its electric models — a fact CFO Paul Jacobson admitted openly in recent investor meetings.
“The journey to profitability was heavily driven by scale,” Jacobson said at a J.P. Morgan conference last month. “But we’re probably going to scale up much slower now over the next few years.”
High battery costs, complex supply chains, and underutilized factories have all contributed to the red ink. Unlike Tesla, which vertically integrates much of its production, legacy automakers like GM are still adapting their century-old manufacturing systems to the EV era.
GM’s Pivot: Fewer Models, Lower Costs
Facing reality, GM is shifting strategy. Instead of flooding the market with new EVs, the company now plans to:
- Focus on structural cost reductions in existing EV platforms
- Delay or cancel lower-priority electric models
- Optimize battery component manufacturing to avoid overcapacity
- Prioritize profitability over market share in the short term
“We have the opportunity to deploy capital not to proliferate the portfolio, but to make EVs that actually make money,” Jacobson emphasized.
Still, investors are watching closely. GM’s stock dipped 3.2% following the earnings revision, and rivals like Ford and Stellantis are reportedly reevaluating their own EV timelines.
Sources
The New York Times: “Slowing Electric Vehicle Sales Will Cost G.M. $1.6 Billion”
