General Motors has taken a $1.6 billion hit tied to its electric vehicle (EV) program, signaling a major shift in the once-booming U.S. transition to electric mobility. The move comes as automakers confront slowing consumer demand, rising costs, and a dramatically altered policy landscape following the end of key federal EV incentives.
The charge, recorded in GM's third-quarter earnings, reflects reduced future production capacity, canceled contracts, and other costs related to its EV business. Executives described the adjustment as a "strategic realignment," acknowledging that previous growth projections no longer matched market realities.
The reversal follows President Donald Trump's sweeping economic reform package, dubbed the "One Big Beautiful Bill,'' which last month scrapped the long-standing federal EV tax credit worth up to $7,500 per vehicle. The policy shift removed a key financial cushion for buyers, instantly reshaping the economics of EV ownership and cooling enthusiasm among consumers already grappling with high interest rates and limited charging infrastructure.
Evidence of EV fatigue had surfaced even before the tax credit expired. Automakers reported growing inventories of unsold electric models, dealers complained of dwindling showroom traffic, and fleet operators delayed planned transitions to electric power. Price cuts by leading brands, including GM and Ford, failed to reignite sustained interest.
GM's decision to scale back its EV investments is part of a wider industry trend. Ford recently shelved an aggressive expansion plan and discontinued select EV models, while Honda pulled its jointly developed Acura ZDX electric crossover from the U.S. lineup. Several automakers have announced plans to reintroduce hybrid vehicles, which offer better margins and fewer infrastructure challenges.
Despite this retrenchment, GM said it remains committed to electrification in the long term. Production of its existing models, including the Chevrolet Blazer EV, GMC Hummer EV, and Cadillac Lyriq, will continue, but future rollouts will be paced more cautiously. The company is also shifting more capital toward advanced internal-combustion engines and plug-in hybrid systems, technologies that remain profitable in a market still dominated by gasoline vehicles.
Industry analysts see the development as a defining moment for the U.S. auto sector. Without strong policy support or subsidies, EV adoption could plateau well below earlier projections. Current forecasts suggest electric vehicles may account for just 18 percent of total US auto sales by 2030, far short of the government's former 50 percent target.
The transition to electric mobility, once viewed as inevitable, now appears to be entering a slower, more uncertain phase. Automakers are balancing investor pressure for profitability against environmental commitments, while policymakers weigh economic pragmatism against climate goals.
GM's $1.6 billion charge is more than a financial setback — it represents a broader reality check for America's electric future, one shaped as much by consumer sentiment and policy shifts as by technology itself.
