The EV tax cut was repealed as part of President Donald Trump’s massive tax and spending bill passed earlier this year.
Published October 14, 2025
General Motors Co. is expected to take a $1.6 billion hit in the third quarter as it restructures its electric vehicle strategy following the removal of key federal incentives that are likely to curb demand.
The Detroit, Michigan-based automaker announced the news on Tuesday.
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The company’s disclosure is one of the clearest signs yet that U.S. automakers are scrambling to change production plans in response to slowing demand for electric vehicles (EVs).
The EV market is also facing new strains after President Donald Trump’s administration eliminated a key support for the industry, a $7,500 federal tax credit for electric vehicles, with auto executives warning that sales of battery vehicles will decline significantly in the short term before they eventually recover.
GM said in its filing that it expects “EV adoption to slow” due to recent policy changes, including the end of some consumer tax incentives and less stringent emissions regulations.
“This is a special item based on the expectation that EV sales will be lower than planned due to changes in market conditions and the regulatory and policy environment,” GM told Reuters in a statement.
Automakers are also working to cushion the impact of President Trump’s tariffs, which hit GM $1.1 billion last quarter.
The company estimates trade headwinds will affect its bottom line by $4 billion to $5 billion this year, and said it may take steps to offset at least 30% of the hit.
“These charges are not surprising given recent market trends and the fact that GM has probably been the most aggressive EV driver of any traditional automaker,” said Garrett Nelson, senior equity analyst at CFRA Research.
“We believe automakers, such as Toyota and Honda, that choose to invest more in developing hybrid vehicles are poised to benefit in the U.S. auto market.”
further charges
GM and suburban rival Ford had launched a program that allowed dealers to offer a $7,500 tax credit on EV leases before rescinding the plan after federal subsidies expired.
The automaker warned that additional charges could be incurred as it reevaluates production capacity and manufacturing area.
However, this change will not affect GM’s current portfolio of Chevrolet, GMC and Cadillac EVs.
Charges include $1.2 billion in non-cash impairment charges related to EV capacity adjustments and $400 million in termination fees and commercial payments.
GM said the charge will be recorded as an adjustment to its third-quarter non-GAAP financial results, which are expected early next week.
On Wall Street, the automaker’s stock price is trending higher despite the disclosure. As of 11:00 a.m. (3:00 p.m. Japan time) in New York, it was up about 1%. However, the stock has fallen more than 2% in the past five trading days.
