"EVs Aren't Easy"... GM Faces $7 Billion in Electric Vehicle Losses

6 Billion Dollars Reflected Due to EV Production Cuts
1.1 Billion Dollars in Restructuring Costs for China Operations
EV Subsidy Abolished Last Year... Sharp Decline in Demand

GM announced on the 8th (local time) that it incurred costs amounting to approximately 7 billion dollars due to the reduction in electric vehicle production and restructuring expenses in China. Photo by AP Yonhap News

The scale of General Motors (GM)'s losses related to electric vehicles has expanded to approximately 7 billion dollars (about 10 trillion won). This is due to a sharp decline in electric vehicle demand in the United States and restructuring of its business in China.

According to the Financial Times (FT) on January 8 (local time), GM announced that it would reflect a loss of 6 billion dollars resulting from the reduction of electric vehicle and battery production. In addition, 1.1 billion dollars (about 1.6 trillion won) in restructuring costs for its joint ventures in China were also added.

GM explained, "Due to the expiration of tax credit benefits and the easing of fuel efficiency regulations, demand for electric vehicles in North America began to generally slow down starting in 2025," and added, "Accordingly, we preemptively reduced our electric vehicle production capacity."

Losses increased due to policy changes under the Trump administration. The Trump administration abolished the electric vehicle purchase tax credit, which had provided up to 7,500 dollars per vehicle, as of September 30 last year, and also relaxed fuel efficiency regulations. As a result, GM's electric vehicle sales volume decreased by 43%.

In 2022, GM had announced plans to secure profitability and produce 1 million electric vehicles annually by 2025. However, FT reported that last year, GM's electric vehicle sales amounted to only 169,887 units.

At the end of 2024, GM sold its stake in the third Ultium Cells plant in Michigan, a joint venture with LG Energy Solution, to LG Energy Solution. As GM scaled back its electric vehicle business, LG Energy Solution postponed the mass production schedule of the Michigan plant to the second half of this year.

The expansion of electric vehicle-related losses was anticipated. In October last year, GM projected that the reduction in electric vehicle production would result in costs of 1.6 billion dollars (about 2.3 trillion won). At the time, GM stated that the scale of losses could grow even larger.

Instead, GM plans to reintroduce the Chevrolet Bolt, a low-cost model priced under 30,000 dollars (about 43 million won). To enhance price competitiveness, the company plans to source batteries from the Chinese company CATL.

Meanwhile, GM's stock price fell by 2.4% in after-hours trading on the New York Stock Exchange on the same day. However, over the past year, the stock price has risen by about 67%.