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General Motors will report a negative impact of $1.6 billion in its next quarter after the US cut tax incentives for electric vehicles and relaxed rules controlling emissions.
shares It fell 3% before the opening bell on Tuesday.
The EV tax credit expired last month. The clean vehicle tax credit was up to $7,500 for new EVs and $4,000 for used EVs.
General Motors, which had led among U.S. automakers with plans to shift production to an electric fleet of vehicles, said in a regulatory filing Tuesday that it will have to include a $1.2 billion non-cash impairment and other charges due to EV capacity adjustments. There is also a $400 million charge mostly related to contract cancellation fees and commercial settlements associated with EV-related investments.
GM warned that adjusting production could have additional impacts, with non-cash charges potentially impacting future operations and cash flow.
The company said its EV capacity realignment will not impact its retail portfolio chevroletGMC and Cadillac EVs are currently in production, and it expects these models to be available to consumers.