GM $7.1 Billion Charge for Q4 2025
GM $7.1 billion charge reflects an EV capacity realignment and SAIC-GM restructuring and will alter Q4 2025 GAAP results and non-GAAP comparables.
KEY TAKEAWAYS
- An 8-K disclosed a $7.1 billion charge for Q4 2025.
- About $6.0 billion tied to EV capacity realignment, including $1.8 billion impairments and $4.2 billion cash.
- GM will treat Q4 and China restructuring items as non-GAAP adjustments and warned of smaller 2026 charges.
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General Motors Co. (GM) said in an 8-K it will record a $7.1 billion charge for the quarter ended Dec. 31, 2025, driven by an electric vehicle (EV) capacity realignment and costs tied to restructuring its China joint venture. The company attributes these moves to recent U.S. policy changes.
Q4 Charge Breakdown
About $6.0 billion of the charge relates to EV adjustments in GM North America, while roughly $1.1 billion stems from non-EV items, mainly restructuring at the SAIC-GM joint venture and an additional legal accrual. The EV-related portion includes approximately $1.8 billion of non-cash impairments and write-downs of EV and battery assets, and about $4.2 billion tied to supplier settlements, contract cancellations, and other cash payments.
GM recorded $1.6 billion of related charges in the third quarter, including $1.2 billion of non-cash impairments and $0.4 billion of contract cancellations and settlements. Combined with the Q4 items, the company has outlined at least $7.6 billion of EV-related charges in 2025.
The non-EV reserve related to the SAIC-GM restructuring and legal accrual carries an estimated $0.5 billion of cash outflows expected over time.
Policy Impact and Outlook
GM said its prior EV capacity expansion was based on expectations of steadily tightening fuel economy and emissions regulations and federal incentives. The company cited the termination of certain federal consumer EV tax credits and reduced emissions-rule stringency as factors slowing near-term EV adoption.
Rightsizing measures include impairments of EV assembly and battery assets, along with workforce reductions such as layoffs and shift cuts at Factory ZERO (Detroit-Hamtramck) and battery operations in Lordstown, Ohio.
GM will treat the EV-related charges, China restructuring costs, and legal accrual as adjustments in its non-GAAP financial measures, disclosing this treatment in its 2025 Form 10-K. The company described these as internal accounting and restructuring actions that do not require external regulatory approvals.
Management expects additional, but smaller, cash and non-cash charges in 2026 from ongoing supplier negotiations. It also warned that proposed greenhouse-gas rules could impair its emissions credit assets, similar to a prior Corporate Average Fuel Economy (CAFE) credit charge. The company said these 2026 charges will be significantly less than the EV-related charges recorded in 2025.
GM stated that the realignment does not affect its current retail Chevrolet, GMC, and Cadillac EV models in production, which it plans to continue offering. The company will report Q4 and full-year 2025 results on Jan. 27, 2026, and said it expects to reduce EV losses in 2026 and beyond by addressing overcapacity swiftly.
