GM dips after revealing it will take a $1.6 billion Q3 hit due to its EV pullback
A few weeks after the end of the $7,500 federal EV tax credit — and the end of General Motors’ attempt to extend it — GM says slowing EV sales will cost it $1.6 billion in its third quarter.
“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. These developments have caused us to reassess our EV capacity and manufacturing footprint,” GM wrote in a Tuesday filing.
As a result, GM said, the company will take a $1.2 billion charge pegged to EV capacity adjustments. An additional $400 million cash hit will come from canceled EV contracts with suppliers. The automaker said it’s “reasonably possible” that it will incur more EV-related charges in the coming quarters.
GM reports its third-quarter earnings next week. In the first half of the year, rival Ford has posted losses to the tune of $2.18 billion related to its EV business.
