LONDON (ShareCast) - (Sharecast News) - General Motors Corp is to take a $1.6bn hit as it reassesses its electric vehicle offering, the US car giant announced on Tuesday.
The market for electric vehicles has come under intense pressure recently, as consumer demand softens and governments withdraw subsidiaries.

In the US, Donald Trump's administration - a vocal support of fossil fuels - has removed a $7,500 federal tax credit for EVs, in a significant blow to the sector.

In a brief statement to the New York Stock Exchange, GM said: "Following US government policy changes, including the termination of certain consumer tax incentives...and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow."

As a result, it had opted to "reassess" its EV capacity and manufacturing footprint, with a $1.6bn charge approved in the three months to 30 September, "based on a planned strategic realignment of our EV capacity and manufacturing footprint to consumer demand".

The sum includes a $1.2bn non-cash impairment and $400m for contract cancellation fees and commercial settlements.

However, the owner of Chevrolet, Buick, Cadillac and GMC flagged that the review was ongoing, meaning it was "reasonably possible" that the charges could continue to rise.

As at 1300, the stock had lost 2% in pre-market trading.

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