Top car manufacturer General Motors faces a bruising start to 2026 with thousands of jobs scrapped after an electric car nightmare. The major US car firm confirmed it would take on a £4.5billion ($6 billion) charge to unwind some of its electric-vehicle investments.
General Motors has claimed that “slower near-term EV adoption” was the reason behind the move. According to specialists, around £3.1million ($4.2billion) of GM's charges are related to contract cancellations and settlements with suppliers. It is understood that these suppliers had planned for higher production volumes before the contract was scrapped.
The company is also set to record a one-time earnings hit of around £5.2billion ($7.1billion) in its quarterly financial statement. As well as the financial blow, the major car manufacturers has also laid off a total of 1,140 hourly workers in a blow to staff.
The company’s Detroit-Hamtramck facility is said to be operating at just half its of its total capacity since the job losses took hold. GM is not the only manufacturer to cut back on its electric car development in recent months, raising concerns about job security.
GM had built up its EV capacity under President Biden's administration, where EVs looked to be a major priority. Back in 2021, the brand set a goal of ensuring that all of its cars and trucks were built to run on zero-emissions by at least 2035.
The company offers one of the largest range of electric vehicles with 13 options across its model range. Popular electric vehicles in their product range include the Chevrolet Equinox, the Cadillac Escalade, the GMC Hummer pick-up and Hummer SUV.
However, a cutback on emissions regulations and incentives, such as the federal electric vehicle tax credit, under President Trump has led to a reduction in new car sales. GM CEO Mary Barra has suggested that Government policy was partly to blame.
She said: “With the termination of certain consumer tax incentives and the reduction in the stringency of emissions regulations, industry-wide consumer demand for EVs in North America began to slow in 2025. As a result, GM proactively reduced EV capacity.”