General Motors reported a $1.6 billion loss in the third quarter, tied to its EV investments, according to a government filing, while simultaneously preparing to ramp up production of gasoline-powered cars at multiple assembly facilities across the U.S.
In an 8-K filing with the U.S. Securities and Exchange Commission on Tuesday, the Detroit automaker stated that $1.2 billion of the loss came from unused equipment originally intended for electric vehicle production. The remaining $400 million was tied to contract termination fees owed to suppliers.
“Following recent U.S. 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 the filing.
The financial charges underscore the strain placed on the electric vehicle industry due to the withdrawal of federal backing. This includes the elimination of the $7,500 EV tax credit and the discontinuation of government grants previously provided to bolster domestic manufacturing of EV parts, batteries, and finished vehicles.
The company also affirmed that it is still evaluating its EV production capacity and manufacturing operations, indicating that more charges may be disclosed in upcoming quarters.
GM has implemented several production adjustments in response to a smaller-than-expected EV market. This year, the company has reduced shifts and laid off hundreds of employees at its Detroit-Hamtramck electric vehicle facility, Factory Zero, with those workers expected to remain laid off through the end of the year.
For the quarter ending June 30, GM reported a net income of $1.89 billion, marking a 35% decline from the same period last year, largely due to a $1.1 billion impact from tariffs. GM is set to release its third-quarter earnings on October 21.
General Motors was one of the first automakers to commit billions toward the electric vehicle market, which ultimately fell short of expectations. At one stage, the company had outlined plans to invest $30 billion by this year, aiming to launch numerous new EV models and expand its battery manufacturing capabilities.
GM has stated that the recent production changes provide greater flexibility to scale electric vehicle output up or down based on market demand.
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