GM takes US$1.6 billion charge as it reassesses EV plans

[WASHINGTON] General Motors said on Tuesday (Oct 14) it will take US$1.6 billion in third-quarter charges as it realigns electric-vehicle plans following the expiration of a key federal support, which is expected to pressure demand.

Shares of the automaker were down 2.5% in premarket trading.

US carmakers have delayed or cancelled new EV models and battery plants, and pared other EV investments, citing weaker-than-expected demand.

The market faces further strain after the Trump administration removed a US$7,500 federal tax credit for EVs, a key support for the industry.

“Following recent US Government policy 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,” GM said in a filing on Tuesday.

The charges comprise a US$1.2 billion non-cash impairment related to EV capacity adjustments and US$400 million for contract-cancellation fees and commercial settlements. REUTERS