GM to take $1.6bn charge amid EV strategy overhaul

Core Viewpoint - General Motors (GM) is facing a $1.6 billion charge in Q3 due to a revision of its electric vehicle (EV) strategy, influenced by recent changes in US federal policies that may reduce demand for EVs [1][2]. Financial Impact - The $1.6 billion charge includes $1.2 billion in non-cash impairment and other costs related to adjustments in EV capacity [2]. - GM anticipates an additional $400 million in expenses primarily from contract cancellations and commercial settlements associated with its EV investments [2]. - The company has indicated that further financial impacts may occur as it reassesses its EV capacity and manufacturing footprint, including investments in battery component production [2][3]. Production Adjustments - GM stated that the realignment of its EV capacity will not affect its current retail offerings, including the Chevrolet, GMC, and Cadillac EV models already in production [3]. - The company plans to temporarily halt production of two electric Cadillac SUV models at its Spring Hill, Tennessee plant in December due to reduced federal support for EVs [4]. Market Context - The adoption rate of EVs is expected to decline following the expiration of consumer tax incentives, which previously provided up to $7,500 for new vehicles and $4,000 for used ones [1].