General Motors announced it will record a $1.6 billion charge in its third-quarter results, tied to a reassessment of its electric vehicle strategy. The decision follows slower-than-expected demand growth and the rollback of certain U.S. government incentives that had previously bolstered EV adoption. The company said approximately $1.2 billion of the charge is a non-cash impairment related to production adjustments and unused capacity, while the remaining $400 million is linked to contract terminations and settlements. GM emphasized that it remains committed to the EV transition but will prioritize models with stronger consumer traction, such as its Silverado EV and Cadillac Lyriq.

The move signals a more cautious approach from one of the world’s largest automakers as the industry faces a reality check on EV profitability and supply chain costs. Global automakers, including Ford and Volkswagen, have recently slowed EV rollouts or trimmed forecasts as battery expenses and infrastructure gaps weigh on returns. GM’s decision underscores how automakers are recalibrating expectations amid evolving consumer behavior, rising competition from Chinese manufacturers, and fluctuating policy support. The company reiterated its goal to balance innovation with financial discipline while maintaining flexibility in its long-term electrification roadmap.