Dive Brief:
- A lower electric vehicle growth rate, anticipated for the coming year, presents General Motors with “the opportunity to go in and get more cost out of the system,” CFO Paul Jacobson said during a keynote panel at Bank of America's 2026 Global Automotive Summit on March 18.
- The Detroit-based company is one among several automakers that adjusted their EV strategies last year in response to slowing consumer demand and spending — paring down its EV production and moving to right-size both its EV capacity and manufacturing footprint, according to its 2025 full-year results published in January. GM recorded $6 billion in EV-related charges associated with those efforts for its fourth quarter last year.
- “As we know, we have a significant sort of special cash headwind in 2026,” Jacobson said of its EV restructuring plans and costs, according to a panel transcript. “We are working very aggressively to get that behind us. My goal would be to have all of this behind us by the end of the second quarter.”
Dive Insight:
U.S. EV spending has slumped in recent years due to inflationary pressures on buyers, tariff and tax policy changes and rising competition in the industry. New EV sales slumped by 26.8% year-over-year in February, data from Cox Automotive found. The Cox report pointed to the GM-owned Chevrolet as the month’s “standout performer,” with sales volume increasing by more than 70%.
GM has walked back its EV manufacturing and production over the past two years: for example, selling its stake in an EV battery plant to LG Energy Solution in December 2024, CNBC reported at the time. Last year, the automaker discounted its Chevrolet BrightDrop electric van, as well as moving to impair certain EV assets, according to its fourth-quarter and full-year 2025 earnings report published Jan. 27.
GM reported a non-cash impairment of $1.8 billion associated with the discontinued van production and impairments, as well as $4.2 billion in cash charges related to contract cancellations and supplier settlements, for Q4 2025. It anticipates “significantly smaller,” but still material, EV-related charges to continue to occur this year.
The company is “making good progress” in continuing to negotiate such claims, Jacobson said during his keynote, which focused on GM’s strategy surrounding the growth of its OnStar subscription platform. That includes new technology and computing platforms, including “software-defined vehicle architecture” for EVs set to debut in 2028.
During a question and answer session with Bank of America’s Alexander Perry, who serves as director and head of its North American Autos Equity Research, Jacobson also mentioned how tariffs and other macroeconomic trends have continued to impact the automaker.
“I don't think you can talk about '26 without spending just a minute on 2025, which really, as you look back on it now, is almost a set-up year,” Jacobson said. There was “a lot of anxiety” in the market about tariffs — but it became clear that the automotive industry was “really, really important to the administration,” he said.
“So even implementing tariffs, they wanted to make sure they can maintain competitiveness, and I think they've found a nice sort of narrow path to do that,” he said. “Would we rather not pay $3 billion in tariffs? Probably. But at the end of the day, I think what we've seen is we can adapt to that. We can overcome it and use it as a little bit of a speed bump before getting back on track.”
For the full-year 2025, GM paid $3.1 billion in tariffs, according to its earnings presentation announced Jan. 27. However, “resilient financial results” helped to mitigate over 40% of that figure, according to the presentation, citing results including adjusted auto free cash flow of $10.6 billion and adjusted EBITDA of $12.7 billion.
Tariffs have collectively cost automakers approximately $35.4 billion since 2025, according to an analysis by Automotive News, which tracked financial reports available up to mid-March. Toyota is reportedly set to pay the highest tariff bill, coming in at approximately $9.1 billion in related costs for its fiscal 2026, according to the analysis published Monday.
