One of the most successful car brands in the world has announced a huge $6billion (£4.5billion) hit to the business to axe some electric vehicle investments.
General Motors said it would take the $6billion charge just months after a $1.6billion charge after changing its electric car plans.
The Michigan-based manufacturer said the fees came after reducing its planned electric vehicle production and additional fallout from the wider supply chain.
The majority of the writedown, which will cost around $4.2billion (£3.1billion), is related to cancelling contracts with suppliers.
In a filing, GM confirmed that the changing plans would not impact its EV lineup, stating: “We plan to continue to make these models available to consumers.”
General Motors is the owner and manufacturer of some of the most popular brands in the United States, including Chevrolet, Buick, GMC and Cadillac.
General Motors states that it offers the broadest range of electric vehicle models in the United States, with 13 models across its four brands.
It also has the second-largest volume of electric vehicles sold in the United States, with strong demand for its full-sized pick-up trucks.
General Motors announced a huge $6billion hit after changing its electric vehicle plans
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This includes the Chevrolet Equinox, Blazer and Silverado, the Cadillac Escalade IQL, Escalada IQ, Vistiq, Lyriq, Lyriq-V, and Optiq, and the GMC Hummer pick-up, Hummer SUV and Sierra Denali.
Despite the writedown, GM has been one of the biggest investors in electric vehicle technology, headlined by its Factory Zero facility in Detroit.
The 4.51 million square foot assembly plant, which was supported by a $2.2billion (£1.6billion) funding boost, marking the brand’s largest investment in a plant in its history.
However, it announced earlier this week that it would be axing more than 1,000 workers from Factory Zero, as well as reducing production at the facility to just one shift.
It also previously invested $2.3billion (£1.7billion) in its second battery cell manufacturing plant in Spring Hill, Tennessee.
Demand for new electric vehicles in the United States has dropped significantly in recent months following the government’s decision to axe the $7,500 (£5,590) federal EV incentive.
The move from GM to write down its EV investments comes just weeks after Ford announced a massive $19.5billion (£14.5billion) financial hit.
This was down to several cancelled electric vehicle programmes, including the decision to axe the F-150 Lightning electric pick-up truck.
Ford’s new electric vehicles are expected to launch in 2027 | FORD
In taking the near-$20billion hit, Ford CEO Jim Farley said it was a necessary move, allowing the Blue Oval to prepare for an overhaul of its EV offering.
Mr Farley told Reuters: “When the market really changed over the last couple of months, that was really the impetus for us to make the call.”
Ford is now planning on moving forward with a new EV architecture in the coming years to enable the production of affordable models.
This will be headlined by an affordable electric pick-up with a guide price of around $30,000 (£22,362). This should be released in 2027.