Oct. 14 (UPI) — General Motors will take a nearly $2 billion financial loss in its third quarter over its electric vehicle program after a shift in U.S. policy.
On Tuesday, the Detroit-based carmaker revealed a $1.6 billion dent in a public filing with the Securities and Exchange Commission and added its “ongoing” in GM’s EV capacity reassessment.
It comes amid a turnaround in U.S. regulations on EV’s and the end to $7,500 federal tax credits under the Trump administration set in place by then-U.S. President Joe Biden.
“Following recent U.S. government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow,” the company stated in its filing.
GM’s more than $1 billion loss will include $1.2 billion in non-cash and other special charges. The other $400 million will result from contract cancellation fees and other commercial settlements related to GM’s EV investments over the last few years.
But it warned it was “reasonably possible” General Motors could face future similar charges.
The company is set to officially report the results next Tuesday. But GM’s finance shakeup will not impact its adjusted earnings so far as its relation to the New York Stock Exchange.
GM is a U.S.-based global company with 50 facilities in 19 states, including 11 vehicle assembly plants.
Its new energy arm was initially expected to double GM’s revenue over the next few years as the Michigan-based vehicle conglomerate rolled-out its EV program five years ago.
Over the summer GM announced a $4 billion U.S. investment to build manufacturing plants for both gas and electric cars in Kansas and Tennessee over the next two years.