GM’s EV withdrawal cost the company $6 billion

Good morning! It’s Friday, January 9, 2025, and this is The Morning Shift, the daily roundup of top headlines from around the world in one place. Here you’ll find the top stories shaping the way Americans drive and get around.

In this morning’s edition, GM just lost $7.1 billion between a write-off in its electric vehicle business and a restructuring in China, Jeep is actually cutting prices in 2026, Polestar posted a quarterly sales boost thanks to Europe, and China could see sales stagnate this year.

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General Motors is getting another massive $6 billion hit for unused electric vehicle investments related to production changes the automaker is making in 2025, according to government filings. To add insult to injury, GM said it is also taking $1.1 billion in charges for restructuring its China business. At a minimum, these charges do not involve operational or production changes to the vehicles that have not already been announced.

In October, GM said unused equipment for electric vehicle production totaled $1.2 billion. GM assigned the remaining $400 million of what it owed suppliers for contract cancellation fees. Combining this with the recent filing, we can see that GM has now shelled out $7.6 billion for reducing EV production in 2025. From the Detroit Free Press:

“With the end of certain consumer tax incentives and the drastic reduction of emissions regulations, North American industry-wide demand for electric vehicles began to decline in 2025. As a result, GM has proactively reduced electric vehicle capacity,” GM said in the filing.

The fees come down to $1.8 billion in unused EV equipment and about $4.2 billion in trade agreements with suppliers, contract cancellation penalties and other fees, according to the Freep. GM says there could be more costs in 2026 from ongoing negotiations with its suppliers, but they wouldn’t be as costly as the EV-related tariffs that came last year.

Of course, this is all small potatoes compared to the $19.5 billion cut Ford took at the end of 2025 for making a very similar move, but who’s counting?

I’m not an accountant – clearly – so I can’t understand how taking a multi-billion dollar hit and throwing the money away is more financially prudent than just building and selling these cars, but I guess it is.

Jeep is doing something almost no other automaker has thought to do in an effort to boost sales in 2026: It’s cutting prices and simplifying its lineup. It now offers fewer trim levels and lower base prices, while adding more standard equipment. What an original idea. Maybe something so radical could catch on in the industry? I mean it won’t, but it would be nice, right? From Bloomberg:

A Wrangler Sport S now starts at $42,495, down $1,350 from the previous model year. Opting for a version with LED lights, all-terrain tires and a heated steering wheel and seats now sets the customer back about $5,000, up from nearly $9,400 previously.

Jeep still has a long way to go if it wants to return to the peak it saw in the mid-to-late 2010s. Last year, its share of the SUV market fell to 5.6 percent, its lowest since 2002. That’s well above the 13.4 percent peak it enjoyed in 2016, when not all automakers were still all-in on the SUV craze.

Polestar just got a much needed win and they have Europe to thank. The Sino-Swedish automaker just posted a sharp increase in vehicle sales in the fourth quarter, which was helped in large part by a recent strategy in Europe. The company’s sales rose 27% to 15,608 vehicles in Q4. In total, it sold 60,119 cars in 2025.

Because of the US tariffs, Polestar decided last year that it would spend more time focusing on Europe, which now accounts for 78% of its sales. This move seems to have worked for the better. From Reuters:

Polestar has also reduced its focus on online, direct-to-consumer sales in favor of a traditional dealer-led model, expanding its sales network, although the company has closed all 30 of its retail sites in China.

Like its Volvo sister, Polestar is also increasingly dependent on Geely’s platforms and supply chain to cut costs, reduce development expenses and improve efficiency.

It’s a small win for Polestar, to be sure. But at the end of the day, a win is still a win.

China’s car sales have seen extraordinarily high growth for years, but that will almost certainly change in 2026. At the same time, the strong EV exports the country enjoyed in 2025 are unlikely to continue. In 2025, car sales increased by 3.9% compared to 2024, and in 2024, they increased by 5.3% compared to 2023. Don’t expect the same trend to continue this year. From Reuters:

Domestic demand faded in the last quarter as many cities and provinces cut or suspended government subsidies for car trade-ins due to a lack of funding, intensifying cut-throat competition and prompting automakers to step up overseas expansion to offset a sluggish domestic market.

It’s quite possible that 2026 will end up being China’s worst car sales year since 2020, when, you know, there was a global pandemic. And, the expansion of auto subsidies as part of the country’s consumer goods trade-in program is unlikely to prevent sales from falling.

God, Apple was so cool. I mean, I’m still one Apple Guybut everything feels so stagnant now. It really needs a badass like Jobs at the helm to inspire (read: scare) people into innovation. If you want to learn more about the debut of the iPhone, go to History.com.

Oh my god I love this song and I have a great relationship with my dad so I can’t even relate to it – it’s just so powerful and awesome. For me, “Kyoto” is one of the best songs of the 2020s and there is some stiff competition.

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