Driving the news: General Motors $GM ( ▲ 2.75% ) will take a $1.6 billion hit related to its electric vehicle plans, including $1.2 billion in non-cash charges from capacity adjustments and $400 million in cash for contract cancellations and commercial settlements.
For context: The charges (according to a regulatory filing) reflect GM scaling back from aggressive EV investments that assumed demand levels that never materialized. At one point, the company planned to invest $30 billion in EVs by 2025.
GM said its reassessment of EV capacity is "ongoing," signaling more charges could come in future quarters.
The automaker cited the end of the $7,500 federal EV tax credit, saying "we expect the adoption rate of EVs to slow."
Big picture: Even as manufacturers pull back on capacity, the inventory already built has to get sold. Meaning deeper discounts and longer turn times are likely until pricing resets or demand recovers.
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