General Motors announced on Thursday that it will record a $7.1 billion special charge for the fourth quarter of last year, an expense directly tied to the company's scaling back of its electric vehicle business and advancing its restructuring plans.
The Detroit-based automaker stated in a public filing that the aforementioned charge comprises two main components: approximately $6 billion related to adjustments for its EV business, stemming from the current weakness in electric vehicle market demand; and $1.1 billion in expenses (including $500 million in cash outlays), primarily allocated for implementing a previously announced restructuring plan.
This special charge will impact General Motors' net profit but will not be included in its adjusted earnings. In fact, the market had anticipated this announcement—the automaker had stated last October that it would reassess its EV business strategy, leading to a $1.6 billion related charge booked in the third quarter.
Prior to General Motors' disclosure of this substantial asset writedown, its competitor Ford Motor had revealed in December that it expected to record a special charge of approximately $19.5 billion, funds intended for adjusting corporate priorities and scaling back investments in the pure electric vehicle sector.
General Motors' Chief Financial Officer, Paul Jacobson, said in an interview last October: "We remain confident that the electric vehicle market has broad prospects, and the company possesses a highly competitive product portfolio. However, to reduce the production costs of electric vehicles, we indeed need to push forward with a series of structural adjustments."
Automakers typically exclude "special items" or one-time expenses from adjusted financial results, an practice aimed at providing investors with a clearer view of the operational performance of the company's core businesses.
General Motors pointed out that the impairment charges related to its EV business in the fourth quarter include approximately $1.8 billion in non-cash expenses; the remaining $4.2 billion is associated with supplier commercial settlements, contract termination fees, and other related costs, which will result in cash outflows upon actual payment.
In its Thursday filing, General Motors also mentioned that the company expects to incur additional significant cash and non-cash charges in 2026 related to ongoing supplier commercial negotiations, but the "amount will be significantly lower than the EV business-related charges recorded for 2025."
Furthermore, due to the Trump administration's plans to introduce new regulations on greenhouse gas emission standards, General Motors may need to record additional charges related to emission credits.
General Motors was one of the first automakers to invest tens of billions of dollars in the electric vehicle market, yet the market's development has not met initial expectations. The company had once planned to invest $30 billion in its EV business, covering the development of dozens of new models and the construction of battery production capacity.
Since the Trump administration prematurely terminated the federal electric vehicle tax credit policy in September (which previously offered a $7,500 tax rebate to eligible EV buyers), the overall U.S. electric vehicle market has faced declining sales.
General Motors' stock closed at $85.13 on Thursday, with a daily gain of nearly 4%. The company's stock performed strongly in 2025, rising over 50% for the full year, ranking it at the top among all major listed automakers.
General Motors is scheduled to release its fourth-quarter earnings report on January 27th.
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