WASHINGTON (dpa-AFX) - General Motors has announced that it will take a $7.1 billion hit in special charges for the fourth quarter of last year.
This comes as the company reevaluates its investments in electric vehicles and restructures its operations in China. The automaker from Detroit explained that around $6 billion of this charge is connected to adjustments in its EV strategy due to weaker demand than anticipated.
The remaining $1.1 billion mainly stems from a significant overhaul of a joint venture in China, which includes about $500 million in cash expenses.
These charges will impact GM's net income as reported, but they won't be included in the adjusted figures. This news follows a previous $1.6 billion charge highlighted in October when GM first hinted that it was rethinking its EV initiatives.
Ford Motor, a competitor in the area, took similar actions in December, revealing nearly $19.5 billion in charges related to restructuring and cuts in electric vehicle investments.
GM clarified that about $1.8 billion of the EV-related charges are non-cash impairments, while the rest involves supplier settlements, contract cancellations, and other costs that will be incurred over time. More EV-related charges are anticipated in 2026, but at lower amounts.
Even with these challenges, GM remains optimistic about the long-term potential of electric vehicles, although it recognizes that traditional gas-powered cars will continue to dominate for a while longer.
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