GM takes a $6 billion hit thanks to EV Whiplash policy

Welcome back to Critical materialsyour daily roundup of news and events shaping the world of electric vehicles and technology. On the list today: China wants to limit excess capacity in battery manufacturing through greater oversight. In addition, automakers will unveil several exciting new electric vehicles at the Brussels Motor Show this weekend.

But first, GM is scaling back its electric vehicle ambitions, and that comes with a 10-figure price tag. Let’s dig deeper.

25%: GM earns $7.1 billion as it scales back electric vehicle plans

Photography: Patrick George

During the 2020s, automakers moved quickly and spent big on electric vehicles. Billions of dollars have been poured into re-equipping factories, developing new models and concluding contracts to manufacture batteries.

After the Trump administration and Congress targeted pro-electric vehicle policies last year, that momentum began to wane. Automakers have embarked on a costly decline as they unwind some of their investments in electric vehicles and refocus on combustion.

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For GM, this decline came at a heavy price. The company booked $7.1 billion in fees in the fourth quarter of last year, it said Thursday SEC filingMost of them are a result of reversing plans for electric cars.

The automaker attributed the $1.1 billion to costs associated with restructuring its joint venture in China, where it operates under the SAIC-GM banner. The bulk of the hit, about $6 billion, had to do with hitting the brakes on electric vehicles in North America. This is in addition to the $1.6 billion in fees collected last year, also due to the slowdown in electric vehicle sales.

Here’s how GM explained the move:

With the end of some consumer tax incentives and less stringent emissions regulations, industry-wide consumer demand for electric vehicles in North America will begin to slow in 2025.

As a result, GM has proactively reduced electric vehicle capacity, including by converting the company’s assembly plant in Orion, Michigan from production of electric vehicles to production of full-size SUVs and full-size pickup trucks powered by internal combustion engines, where we believe we have unmet demand, and we have proactively reduced battery cell capacity, including by selling our interest in Ultium Cells LLC’s Lansing, MI facility to LG Energy Solution.

The $6 billion includes $1.8 billion in non-cash charges and $4.2 billion that will have a cash impact, including contract cancellation fees. Crosstown rival Ford made a similar announcement last month, albeit on a larger scale. It is expected that Hit more than $19 billion to profits due to its re-strategy, which saw the cancellation of the F-150 Lightning.

GM was the second-biggest-selling electric vehicle maker last year in the United States after Tesla. Its electric vehicle portfolio is among the strongest in the industry, with about a dozen models across the Chevrolet, Cadillac and GMC brands.

But the expiration of the $7,500 federal tax credit and the rewriting of corporate average fuel economy (CAFE) regulations, which now no longer carry any penalties, have changed the calculus for automakers. Electric vehicle sales declined in the fourth quarterIt is not clear how quickly it will recover.

GM made clear that its deep lineup will not be affected by Thursday’s announcement.

“The strategic realignment of electric vehicle capacity does not impact the existing retail portfolio of Chevrolet, GMC and Cadillac electric vehicles in production,” GM said. “We plan to continue making these models available to consumers.”

50%: China seeks to tighten the noose on excess battery production capacity

Silicon Anode Battery Group14

Photography: Group14 Technologies

The Chinese government has summoned the country’s largest battery makers for electric vehicles and energy storage systems to a closed-door meeting to mitigate price wars and limit excess battery production capacity, the state-run company said. China Daily reported Thursday.

About 16 companies attended the session, including CATL, BYD, Gotion, Svolt and Eve Energy, as Chinese regulators pledged to tighten market oversight, impose stricter rules around pricing, improve quality and crack down on intellectual property violations, the outlet reported.

According to research firm BloombergNEF, China faces a significant oversupply of batteries. In other words, the country has built much more battery capacity than the world can currently accommodate, even before taking into account the next wave of projects already underway.

This oversupply has helped drive battery prices to new lows, but uncontrolled growth clearly poses problems as well.

75%: The first auto show of the year will feature electric cars at the forefront

Renault Twingo E-Tech Electric (2026) in green

Photo by: Renault

Global carmakers will enter the Brussels Motor Show this weekend with a wide range of futuristic electric cars. Europe-focused models will be strongly highlighted. The region is far ahead of the United States on the EV adoption curve, although it still lags behind China.

EVs worth a look, as compiled by Car Newsincluding Kia’s upcoming EV2, Citroën’s Elo Concept electric utility van, a battery-powered version of the Hyundai Staria van, and Mazda’s second electric vehicle in Europe only after the 6e sedan and Renault’s reborn Twingo electric van.

Meanwhile, BYD will be present with up to nine models on display. Tesla will also be there, offering lower-priced standard Model 3 and Model Y models, according to the outlet.