GM will write off another $6 billion due to reduced investment in electric cars. What about the stock?

US automaker General Motors, which has invested tens of billions of dollars in the development of its electric car business, has announced an impending $6 billion write-down due to a partial wind-down of its investments in electric vehicles. The auto giant warned that this is not the last time this will happen.

General Motors said it will report a charge of about $6 billion for the fourth quarter of 2025 due to reduced investment in electric vehicles. Of that, $4.2 billion will come from cash payments and commercial settlements with suppliers who had planned much higher production volumes, while the remaining $1.8 billion will come from asset impairments and "other non-cash write-downs."

The bulk of the write-offs will affect GM's North American division. At the same time, the auto giant has promised to maintain its American lineup of electric vehicles, which is the widest in the local market. Against the backdrop of ongoing negotiations with contractors, the company forecasts additional expenses in 2026, but expects that their volume will be "significantly lower" than the level of 2025.

GM shares fell 1.4% at the post-market on January 8 in New York - after ending the main trading session with a growth of 3.9%. Before the opening of trading on Thursday, investment bank Piper Sandler raised the rating of the auto concern's securities from neutral to "above the market" (Overweight, corresponding to the recommendation to buy shares), and the target price - from $66 to $98 per share. According to FactSet, 18 out of 28 analysts tracking the company's securities now hold a "bullish" position on GM.

The state of the electric car industry in the U.S. is not a mystery to investors, and GM shares should weather the "electric car storm" relatively well, Barron's wrote. The auto concern classifies these write-offs as one-offs, so they will not affect its financial forecast or the ratio of reported financial results to analysts' estimates, the publication emphasized.

This isn't the first electric vehicle write-down for GM: in October 2025, the company announced a $1.6 billion charge. Since then, its stock price has risen more than 50%. In December, Ford announced similar write-downs for a much larger amount - $19.5 billion - and since then its capitalization has risen 5%, Barron's noted.

Much of GM and Ford's write-offs reflect the reality that demand for electric vehicles has been lower than previously expected, Barron's writes. Before the $7500 tax credit for electric car buyers in the U.S. expires in September 2025, all-electric vehicles accounted for about 10% of all new car sales in the country. Forecasts for the near future are far from this level: Ford CEO Jim Farley estimates that the share of electric cars in the United States primary car market could fall to 5%.

This article was AI-translated and verified by a human editor