GM to take a $1.6 billion hit as tax incentives for EVs are cut and emission rules ease
General Motors will see a negative impact of $1.6 billion in its next quarter after the United States cuts tax incentives for electric vehicles and relaxes rules governing emissions.
Shares fell 3% before the opening bell Tuesday.
The electric vehicle tax credit ended last month. The clean vehicle tax credit was worth $7,500 for new electric vehicles and up to $4,000 for used vehicles.
General Motors, which had led the way among U.S. automakers with plans to convert production to an electric vehicle fleet, said in a regulatory filing Tuesday that it will have to book charges including non-cash writedown and other charges of $1.2 billion due to electric vehicle capacity adjustments. There are also $400 million in fees primarily related to contract cancellation fees and trade settlements associated with EV-related investments.
GM warned it could face additional challenges as it adjusts production, with non-cash charges likely to impact its operations and cash flow in the future.
The company said its realignment of electric vehicle capacity does not impact its retail portfolio of Chevrolet, GMC and Cadillac electric vehicles currently in production, and that it expects these models to remain available to consumers.
