GM puts $6 billion price tag on EV mistake

GM puts $6 billion price tag on EV mistake

Tony Owusu

Mon, January 12, 2026 at 12:33 PM EST

4 min read

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For months, General Motors has been making it clear just how much its electric vehicle business is struggling.

In October, the country's largest automaker by volume said that its board of directors approved third-quarter charges of $1.6 billion in GM North America for a “planned strategic realignment of our EV capacity and manufacturing footprint” to match consumer demand.

U.S. electric vehicle sales by year + market share of new vehicle sales

2025 (through November): over 1 million units, 10.5% market share
2024: 1.3 million, 8.1% market share
2023: 1.2 million, 7.8% market share
2022: 800k 5.8%, market share Source: Cox Automotive

That included a non-cash impairment charge of $1.2 billion in the quarter, as the company is in the process of converting EV manufacturing platforms for other purposes, and another $400 million in contract cancellations and commercial settlement fees.

However, the company warned in an 8-K filing at the time that the $1.6 billion figure could grow substantially as it conducted a reassessment of its EV capacity, manufacturing footprint, and battery component manufacturing.

The company completed its reassessment, and it turns out the $1.6 billion was just the tip of the iceberg.

Photo by Jackyenjoyphotography on Getty Images

GM takes $6 billion charge from EV restructuring

In recent years, GM says that it has spent billions to meet customer EV demand and meet "increasingly stringent" fuel economy and emissions regulations.

And while the effort paid off in a way, as of mid-2024, GM is the second-best-selling EV maker behind Tesla, the company's EV division is nowhere close to profitability.

General Motors Q3 facts at a glance:

U.S. market share: 17%
Electric vehicles sold: 67,000
EV market share: 16.5%
Dealer inventory: Down 16% year over year
EV inventory: Down 30% since June Source: General Motors

In fact, the company announced that it was taking a $1.6 billion charge on the EV operations in just the third quarter. However, it also warned that the number would grow as it assessed the program comprehensively.

GM states in its latest 8-K filing that it will take a $6 billion charge related to its EV operations in the fourth quarter. Those charges include about $1.8 billion in non-cash charges for supplier commercial settlements and contract cancellation fees.

GM will also take cash charges of $4.2 billion as it looks to wind down production in response to waning U.S. demand for electric vehicles.

U.S. EV sales falter after $7,500 tax credit expires

U.S. EV sales dropped sharply in October, the first month without the tax incentive.

Story Continues

Dealers sold 74,835 electric vehicles in the U.S. in October, according to Cox Automotive data, representing a 48.9% year-over-year decrease.

While a nearly 50% decline sounds troublesome, remember that buying activity was exceptionally robust in September due to the expiration of the tax credit.

However, the 30% year-over-year decline is nearly as worrisome.

“October marked a sharp reversal for the electric vehicle (EV) market as the expiration of the federal EV tax credit cooled demand after three months of accelerated sales,” said Stephanie Valdez Streaty, director of industry insights for Cox Automotive.

“Buyers rushed to secure incentives before the deadline, but once it passed, momentum slowed. Inventories climbed quickly, and pricing shifted upward for both new and used EVs, reflecting a market in transition.”

U.S. car buyers purchased 90 different EV models in the third quarter, but only nine sold more than 10,000 units.

Tesla Model Y and Model 3 were top sellers, moving more than 114,000 and 53,000 vehicles, respectively. GM's own Chevy Equinox sold just under 25,000.

However, those three models were outliers.

“The vast majority of EVs sell at a rate of far less than 2,000 units a month, or 6,000 units a quarter. In the volume-driven business of automotive manufacturing, low volume is the enemy; EV profitability remains a distant dream for nearly every automaker,” according to Cox Automotive.

General Motors to lay off over 1,100 workers at Factory Zero

General Motors Factory Zero plant is an all-EV assembly plant located in the Detroit-Hamtramck, Michigan area.

The plant was originally built in 1985, but it was retrofitted to produce electric vehicles (EVs). Currently, it manufactures the GMC Hummer EV pickup and SUV, the Chevy Silverado EV, the Cadillac Escalade IQ, and the GMC Sierra EV.

Largest Regional BEV sales 2024 (according to IEA):

China: 6.4 million
Europe: 2.2 million
U.S.: 1.2 million
Rest of the world: 1 million

In October, GM announced that it would reduce production at the factory to one shift and lay off more than 1,000 workers. This week, a WARN notice filed in Michigan detailed exactly how many workers would lose their jobs and when.

According to a Worker Adjustment and Retraining Notification Act notice GM filed with the Michigan Department of Labour and Economic Opportunity, GM is scheduled to lay off 1,140 hourly employees from Factory Zero effective January 5, 2026.

Factory Zero currently employs about 4,000 workers, but there were also a series of layoffs at the plant earlier this year.

This story was originally published by TheStreet on Jan 12, 2026, where it first appeared in the Automotive section. Add TheStreet as a Preferred Source by clicking here.

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