GM to take $ 1.6 billion in charge associated with downloading EV

Detroit – General Motors The results of the third quarter next week will include an impact of $ 1.6 billion from its all -electric plans for vehicles that are not played as expected.

Detroit carmaker on Tuesday morning at a public submission The $ 1.2 billion mentioned impact will be non -monetary, special fees as a result of adjustments to its EV capacity. The remaining $ 400 million in cash is mainly related to the fees for cancellation of contracts and commercial settlements related to EV investment, according to submission.

The automaker said it reassessed its EV capacity and the production footprint was “continued”, signaling additional fees that could be declared future neighborhoods.

The fees will be reported as special items when GM reports its results from the third quarter on October 21. This means that they will affect the net results of the carmaker, but not their corrected profit or adjusted eBit, which is closely observed by Wall Street.

GM was one of the worst that invested billions of dollars on an EV market that did not finish. At one point the company was Planning to invest $ 30 billion Until this year in EVS, including dozens of new models and battery production capacity.

Fees come against the background of changing EV provisions – especially The end of $ 7,500 for federal tax credits – Under the Trump administration, compared to President Joe Biden, who supports vehicles.

“Following the latest changes in the US government policy, including the termination of certain stimuli for consumers taxes on EV purchases and reducing the rigor of emission provisions, we expect the percentage of EVS acceptance to be delayed,” “” GM said in the submissionS

John Murphy, a longtime analyst at Bank of America, warned earlier this year about such automotive manufacturers who invested heavily in EVS.

“There are many difficult decisions that will have to be made,” said Murphy, who is now with Haig Partners, during an event for Bank of America’s’s Car Wars ReportS “Based on the study, I think we will see the multi -billion -dollar write -offs that flood the titles over the next few years.”

GM EV withdrawal fees come more than a year after Crosstown rival Ford Motor declared a $ 1.9 billion impact From their EV plans.

Ford includes about $ 400 million to write off production assets as well as for additional costs and cash expenses up to $ 1.5 billion This included the cancellation of a large, electric three -row SUV, which was already far from developing and delaying the production of its next -generation electric pickup truck.

GM that offers most EV models In the US, it has made significant profits this year in EV sales, but market size is a niche compared to expectations at the beginning of this decade.

Motor Intelligence has announced that the Detroit Automobile has passed from 8.7% market share in all-electric vehicles to start this year to 13.8% in the third quarter-topping Hyundai motorIncluding KIA, 8.6% until September. EV leader still tracks us Teslawhich is thought to have a 43.1% market share until September.