General Motors (GM) has announced plans to scale back electric vehicle production in the US, which is expected to result in a significant reduction in earnings for the company. Despite selling nearly 100,000 electric vehicles last year, GM is now calling for 'significantly' lower EV volume this year.
6 billion hit in 2025 due to 'EV-related charges,' which included $6 billion in extra charges in the fourth quarter. These changes were largely driven by policy changes from the Trump administration, including the elimination of the $7,500 federal tax credit at the end of September.
GM has an EV in nearly every segment across its Chevy, GMC, and Cadillac brands, with popular models like the Chevy Equinox EV and the upcoming 2027 Chevy Bolt. However, the company is now adjusting its production to right-size capacity and reduce volume, which will likely impact its earnings.
Despite this, GM remains committed to electric vehicles and has raised its 2026 profit guidance to $13-$15 billion on higher ICE truck and SUV sales. The question remains whether GM will be able to maintain its lead in affordable EVs with the arrival of new competitors like Nissan's updated LEAF and Toyota's C-HR.
GM's decision to scale back electric vehicle production is a response to the changing landscape of the industry, driven by policy changes and increasing competition. As the market continues to evolve, it will be interesting to see how GM adapts and maintains its position in the affordable EV segment.
