GM Records $1.6 Billion Charge on EV Rollout Slowdown
General Motors incurs a $1.6 billion financial hit as U.S. electrification incentives wane, forcing production adjustments across its Ultium battery platform. The charge, detailed in third-quarter earnings, stems from excess inventory and deferred investments in battery plants from Ohio to Tennessee. This reversal follows a federal policy shift eliminating $7,500 tax credits for most GM EVs, impacting models like the ‘Chevrolet Equinox EV’ and ‘Cadillac Lyriq’.
GM’s EV sales, reaching 32,000 units in the quarter, represent 5.5 percent of total volume, down from 7.2 percent in the prior period. The company pauses construction at two Ultium Cells facilities, with the $2.3 billion Lansing, Michigan, plant idling until mid-2026 and the $2.6 billion Spring Hill, Tennessee, site delaying expansion by 18 months. Annual production capacity, targeted at 600,000 EVs by 2025, now scales to 400,000 units through 2027.
Ultium’s modular battery architecture, offering packs from 50 kWh to 200 kWh, supports 300 miles of range in base configurations but faces utilization rates below 40 percent at active plants. Joint ventures with LG Energy Solution absorb $900 million of the charge, including write-downs on cathode materials and cell production lines. GM reallocates $500 million to hybrid powertrains, integrating 2.0-liter turbo engines with 44 kWh batteries for 40 mpg combined in forthcoming ‘Silverado’ variants.
U.S. market dynamics exacerbate the strain, with EV inventory swelling to 65 days’ supply versus 52 days for gas models. Chief Financial Officer Paul Jacobson attributes the charge to “evolving regulatory landscapes,” noting tariffs on imported components add $1,200 per vehicle. Production shifts to four-cylinder hybrids in Detroit-Hamtramck yield 450 horsepower and 500 lb-ft torque, targeting fleet buyers comprising 22 percent of GM’s Q3 deliveries.
Battery recycling initiatives at the 1.5 million-square-foot Rochester, New York, facility process 95 percent of Ultium modules, recovering nickel and cobalt for reuse in 2026 models. Software updates via Over-the-Air enable bidirectional charging up to 11.5 kW, aligning with California’s 2035 zero-emission mandate. GM’s global EV order backlog, at 180,000 units, prioritizes North American assembly to comply with 60 percent domestic content rules.
Supply chain redundancies include $300 million for U.S.-sourced lithium from Nevada mines, reducing reliance on Asian imports by 35 percent. Vehicle-to-grid capabilities in the ‘Hummer EV’ support 9.6 kW export, integrating with 500,000 home chargers nationwide. This financial recalibration positions GM for 1.2 million annual EV sales by 2030, up from 200,000 in 2025, amid hybrid sales surging 28 percent year-over-year.
Executive Chairman Mary Barra emphasizes resilience, stating the charge “preserves liquidity for innovation in autonomy.” Partnerships with Honda yield co-developed platforms, sharing 70 percent components for cost savings exceeding $1 billion annually. Regulatory filings with the Securities and Exchange Commission outline $4.2 billion in tax credits claimed through September, with audits pending on eligibility.
