A recent GM EV writedown shows the legacy automaker stepping back from EV development. What does this mean for the future of GM EVs?
Many automakers have announced plans to slow their EV development and production, while others continue to push forward in the electric vehicle market, but much more slowly than before. While the regime change in the United States is a huge part of the change in policies and direction, it’s not all that created the change in the movement toward more electric vehicles. Investors are likely to see stock prices decrease for many automakers, but those with strong ICE programs will quickly bounce back.
Automotive earnings will be significantly impacted by the GM EV writedown
GM just took a $6 billion charge to pull back from EVs, with $4.2 billion going to supplier settlements alone. Anyone creating short-term auto stock analysis reports might see this as a bit of doom and gloom, which could cause some investors to pull out of GM and find other places to put their money, but long-term investors might stay the course with a company that has been around for more than a century. Here’s how to read EV transition charges in earnings reports and what they signal about margins and guidance across legacy automakers.
Fourth quarter margins affected for this legacy automaker
GM records the EV writedown as a special item in its fourth-quarter earnings report. There could be additional charges in 2026 due to the EV transition costs of moving away from an electric vehicle supply chain that expected higher volumes than what GM is offering. This announcement caused stock prices to drop by 2% initially, but the prices quickly bounced back to a growth of 3.9%, which signals support for the responsible manner in which GM is handling this situation.
GM continues to offer a strong EV lineup in America
Despite the United States government basically turning its back on EV support, GM continues to offer the broadest offering of EVs in the U.S. When the current administration took over, automakers were given support and leniency regarding CAFÉ standards and expectations, and electric vehicles lost all support. The Federal EV Tax Credit, which was supposed to continue until 2032, ended on September 30, 2025. Despite these changes, GM and most automakers continue to offer EVs, but not in the same quantities expected before the regime change.
The GM EV writedown is part of responding to customer demands
GM is the second-leading seller of electric vehicles in the United States, behind Tesla. In addition to this position, their lineup of EVs includes many affordable models that appeal to budget-conscious buyers. They also have a battery joint venture with other automakers, including Honda, utilizing the Ultium EV platform. While the company won’t abandon its EV division altogether, the CEO, Mary Barra, has stated that they will react to customer demands for future models.
Electric vehicle sales are down across the entire industry
The GM EV writedown makes perfect sense for the company to close some of its supplier contracts and move forward. Electric vehicle sales are down significantly across the board during the fourth quarter of 2025, which makes perfect sense. The loss of the $7,500 credit accelerated the precipitous decline in sales, after a huge spike by EV buyers to capitalize on this credit before it ended. Now, EVs will only survive if consumers are truly sold on the benefits offered, which doesn’t seem to be the case.
In addition to the decline of EV sales, large V8 engines have made a comeback, which makes perfect sense. Now that CAFÉ standards have been softened, almost to the point of dissolution, automakers can feel comfortable selling gas-guzzlers, which many consumers prefer to smaller, turbocharged engines.
What will the automotive market look like in the future?
The GM EV writedown is a short-term closure of current contracts with suppliers, but EVs are down across the industry, mostly because of price, demand, and functionality. If EVs are going to be the future of driving, several items need to be addressed by automakers, including:
- The average price of an EV must be competitive with gas-powered counterparts
- Charging time and driving ranges must be improved
- Electric trucks must be capable of towing and hauling without losing significant driving range in the process
- Electric charging infrastructure must be improved and made universal
For now, it’s hard to imagine automakers will focus on any of these needs to save the EV market, especially in a country that has all but turned its proverbial back on the electric vehicle market.
