Dive Brief:
- General Motors’ efforts to restructure its electric vehicle segment are nearing their close, with the company recording $2.3 billion in incremental charges related to the strategic initiative for its second quarter ended June 30, according to its earnings results released Tuesday.
- The incremental charges include $900 million in “supplier-related cash charges” and $700 million in order to right-size its battery supply chain, GM CFO Paul Jacobson said Tuesday, according to an earnings transcript. In total, GM has recorded $10.9 billion in EV-related charges since beginning its restructuring of the segment in the second half of 2025, he said.
- “I’m proud to say that we believe these actions substantially complete the material cash charges we expect to incur as we align our EV capacity and manufacturing footprint with the changes in regulatory policy,” Jacobson said. “While circumstances may change in the future, and we may have some true-ups, it's important to get this work behind us.”
Dive Insight:
GM is one of a number of automakers that have walked back or reconfigured their EV segments in recent months. For example, Japanese automaker Honda Motors recently scrapped plans to launch new EV models and is no longer targeting its goal of having EVs make up at least a fifth of its sales by 2030 — a decision that comes as the company recorded its first annual loss in almost 70 years, including $9 billion in EV restructuring costs, Reuters reported in May.
Ford, meanwhile, has made several changes to its EV strategy in recent months, including merging its EV and manufacturing units, after recording a $19.5 billion expense related to its decisions to halt the launch of several EV models in response to week demand in 2025, Quartz reported in April.
The EV pullback comes amid both a change in consumer demand as well as shifts in regulatory policies, such as a decision by the U.S. government to end a federal tax credit for consumer EV purchases last September.
Although EV sales improved sequentially in May, “overall demand remains below year-ago levels,” according to an EV market monitor published by Cox Automotive on June 16. Notably, however, the 21.9% decline in such sales for the month represented the smallest such dip since government assistance — including an EV tax credit — was removed for EV purchases, according to the report.
As it wraps up efforts to right-size its EV segment, GM is also “winning in the segments that matter most,” Jacobson said, which includes its full-size truck and sport utility vehicle products.
“The investments we are making to onshore production, launch key vehicles and expand full-size SUV capacity will give us more flexibility and position us to grow revenue, gain market share, and improve profitability in 2027,” he said.
For the six months ended June 30, GM reported net income attributable to stockholders of $3.9 billion, a 16% drop compared to the $4.6 billion reported in the prior year period.
For the full year, GM is anticipating net income attributable to shareholders to be between $8.4 billion to $9.8 billion, according to its earnings release.
