Ford Motor Company and General Motors have each disclosed billions of dollars in electric vehicle losses in recent regulatory filings, confirming that a sharp slowdown in North American EV demand is stalling sales and forcing Detroit’s two largest automakers to reverse course on ambitious electrification plans. The combined financial hit, totaling more than $11 billion across both companies, reflects a market that expanded factory capacity far faster than buyers arrived, and the fallout is now reshaping product lineups, factory assignments, and the broader timeline for the American shift away from gasoline.
Ford’s $5 Billion EV Deficit Sets the Stage
Ford’s EV division, known as Model e, posted a full-year EBIT loss of about $5.1 billion in 2024, a figure that laid bare the cost of competing on price while volumes remained thin. The company attributed the loss to industrywide competitive pricing pressure, lower wholesales, and unfavorable net pricing, though it noted that cost reductions partially offset the damage. That loss arrived even as Ford was spending heavily to retool plants and develop new battery-electric models, meaning the division was burning cash on both the revenue and investment sides of the ledger simultaneously. In effect, Ford was paying to stand up an EV business at scale while also discounting vehicles to keep them moving off dealer lots.
The 2024 results set the stage for a more dramatic decision. In its annual report covering the year ended December 31, 2025, Ford disclosed that it had moved in December 2025 to rationalize EV manufacturing capacity and its product roadmap, a move detailed in its subsequent 2025 filing. That decision included cancelling planned EVs and ending production of the current-generation F-150 Lightning, a model that had been marketed as a cornerstone of Ford’s electric future. Killing the electric version of America’s best-selling truck line signals that Ford’s leadership concluded the gap between production capability and actual consumer appetite had grown too wide to bridge with incremental fixes. It also underscores that even marquee nameplates are not immune when an automaker decides that capital must be redeployed toward vehicles and technologies with clearer near-term payoffs.
GM Projects $6 Billion in EV Charges
General Motors disclosed a parallel retreat in a Form 8-K filed in early January 2026. The company projected $6.0 billion in EV-related charges for the fourth quarter of 2025, a figure that dwarfs most single-quarter writedowns in the auto industry’s recent history. GM tied the charges directly to a 2025 slowdown in North American EV demand, which the company said followed the termination of certain consumer tax incentives and reduced emissions-rule stringency at the federal level. These charges encompass impairments to EV-specific plants and equipment, supplier commitments, and other assets whose expected earnings power has been sharply revised downward in light of weaker sales.
The policy shifts removed two of the strongest tailwinds that had been propping up EV sales. Consumer tax credits lowered the effective sticker price on qualifying models, while strict emissions standards gave automakers a regulatory reason to push electric vehicles even when margins were negative. With both supports weakened, GM reduced EV capacity and began converting its Orion assembly plant back to production of internal combustion engine SUVs and pickups, signaling that management sees more reliable demand and profitability in conventional trucks than in mass-market EVs. That pivot tells a clear story. When the policy scaffolding fell away, the underlying consumer demand was not strong enough to justify the scale of investment already committed, forcing GM to take large accounting hits now rather than carry underperforming assets on its balance sheet.
Why Capacity Outran Demand
A common thread connects the Ford and GM disclosures. Both companies scaled up EV production infrastructure on the assumption that regulatory mandates and buyer enthusiasm would continue accelerating in tandem. Instead, the market hit a wall. High vehicle prices, limited charging networks outside major metro areas, and range anxiety among mainstream buyers all contributed to slower adoption than the factory buildout anticipated. Many consumers who were curious about EVs balked at paying a premium over comparable gasoline models, especially once generous tax credits began to phase out or became harder to claim. The result was classic overcapacity: expensive plants running below breakeven volume, with each unsold unit deepening the per-vehicle loss and forcing companies to offer bigger discounts just to keep assembly lines moving.
The pricing dynamic made the problem worse. Chinese EV makers and Tesla pushed global prices downward through aggressive competition, squeezing margins for legacy automakers that carry higher labor and legacy pension costs. Ford’s own filings cited industrywide competitive pricing pressure as a primary driver of its Model e losses, and GM’s charges implicitly acknowledge similar pressures on its Ultium-based models. Detroit was caught between the need to cut prices to move inventory and the reality that doing so only widened the gap between revenue and the fixed costs of new battery and assembly lines. Cost reductions helped at the margin but could not close a deficit measured in billions, especially when many of the most cost-efficient EV platforms were still ramping up and had not yet achieved the scale required to spread development expenses over large volumes.
Policy Reversals Accelerate the Pullback
The GM filing is especially instructive because it names the specific policy changes that tipped the balance. The termination of consumer tax incentives removed a direct subsidy that had been worth thousands of dollars per vehicle to buyers, effectively raising the out-of-pocket cost of an EV overnight and pushing some would-be adopters back toward gasoline or hybrid options. Reduced emissions-rule stringency, meanwhile, eased the compliance pressure that had given automakers a financial incentive to sell EVs at a loss in order to meet fleet-average targets. When regulators relaxed those standards, the immediate payoff from every incremental EV sale shrank, making it harder to justify deep discounting or continued expansion of EV-only factories that were already running below planned capacity.
The speed of the reversal is striking. As recently as 2023, both Ford and GM were announcing multibillion-dollar EV investment plans and setting aggressive electrification timelines, presenting fully electric lineups as a near inevitability rather than a strategic bet. Within roughly two years, both companies filed documents with the Securities and Exchange Commission acknowledging that those plans required deep cuts and a rebalancing toward vehicles powered by internal combustion engines. The lesson for the broader industry is that EV adoption in the United States remains heavily dependent on government support, and that support can change direction more quickly than factory retooling cycles allow. Automakers that built capacity for a policy environment that no longer exists are now absorbing the financial consequences, and their experience will likely make peers more cautious about tying long-lived capital investments too closely to any single set of regulatory assumptions.
What the Retreat Means for Buyers and Workers
For consumers, the immediate effect is fewer electric options from two of the country’s largest automakers, particularly in high-profile segments like full-size pickups. Ford’s cancellation of planned EV models and the end of the current F-150 Lightning mean that shoppers looking for an electric truck from a legacy brand will have a narrower field, at least until next-generation products arrive or competitors fill the gap. GM’s pivot at Orion back to gas-powered SUVs and pickups signals that the company expects its near-term profits to come from the vehicle segments where it already holds pricing power, not from an EV market still searching for mass-market traction. Buyers who do want an EV may find that incentives are leaner and that dealers are less willing to bargain aggressively if inventories are trimmed to better match demand.
For factory workers and the communities that depend on auto manufacturing, the capacity shifts carry real stakes. Plants retooled for EV production may now sit underutilized or require yet another round of conversion, and the jobs associated with battery assembly differ in number and skill requirements from traditional powertrain work. The billions in charges that Ford and GM are recording represent not just accounting entries but also the write-off of investments that workers had been told would secure their future in an electrified industry. As management teams reassess where and how quickly to expand EV capacity, some facilities may see renewed investment in conventional vehicle lines while others face uncertainty about their long-term role. The broader message is that the transition to electric vehicles will be more uneven, contested, and sensitive to policy and market swings than early forecasts suggested. That has real consequences for the people building the cars as well as those deciding whether to buy them.
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*This article was researched with the help of AI, with human editors creating the final content.
