GM records $7.1 billion in Q4 charges due to electric vehicles, and China is recalibrating

Detroit – GM It said on Thursday it would record a $7.1 billion special charge for the fourth quarter of last year related to its divestment of electric vehicles and restructuring efforts in China.

The charges include nearly $6 billion related to changes to its electric vehicle plans amid weak demand and $1.1 billion, including $500 million in cash, largely related to a previously announced overhaul of a Chinese joint venture, the Detroit automaker said in a public statement.

These charges will impact GM’s net income but will not impact adjusted results. The announcement was widely expected after the Detroit automaker said in October that it was reevaluating its electric vehicle plans and would initially take a $1.6 billion charge during the third quarter as a result.

GM’s new asset writedowns come after crosstown competition ford motor It said in December that it expects to record about $19.5 billion in special charges related to the restructuring of its business priorities and a decline in investments in all-electric vehicles.

“We still believe there’s a strong future for electric vehicles, and we have a great portfolio to be competitive, but we have some structural changes we need to make to make sure we lower the cost of producing those vehicles,” Paul Jacobson, GM’s chief financial officer, told CNBC in October.

Automakers typically exclude “special items” or one-time charges from their adjusted financial results to provide investors with a clearer picture of their underlying, ongoing business operations.

GM said EV drawbacks in the fourth quarter include non-cash charges of about $1.8 billion. The remaining $4.2 billion relates to supplier trade settlements, contract cancellation fees and other fees, which will have a cash impact when paid.

Electric vehicle surcharges are expected to arrive this year but at an amount lower than the 2025 allocation. “We expect to recognize additional material cash and non-cash surcharges in 2026 related to ongoing trade negotiations with our supply base, which we believe will be significantly less than EV-related charges incurred in 2025,” GM said in a filing Thursday.

The automaker also said it may incur additional charges related to its emissions credits due to proposed regulatory changes to greenhouse gas emissions standards by the Trump administration.

General Motors was one of the first automakers to invest billions of dollars in the electric vehicle market, something that ultimately did not materialize. At one point, the company was planning to invest $30 billion in electric vehicles, including dozens of new models and battery production capacity.

The U.S. electric vehicle sector overall saw a decline in sales after the Trump administration in September put an early end to a $7,500 federal tax credit previously available to electric vehicle buyers.

GM shares closed Thursday at $85.13, up nearly 4% on the day. The stock had a banner year in 2025, rising more than 50% to lead all major publicly traded automakers.

GM is scheduled to report fourth-quarter results on January 27.