General Motors will record a negative impact of US$1.6 billion in its next quarter after tax incentives for electric vehicles were slashed by the US and rules governing emissions are relaxed.
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Shares fell less than 2 per cent before the opening bell on Tuesday.
The EV tax credit ended last month. The clean vehicle tax credit was worth US$7,500 for new EVs and up to US$4,000 for used ones.
Meanwhile, the Environmental Protection Agency has been working on easing rules aimed at cleaning up auto tailpipe emissions as the Trump administration moves to undo incentives for carmakers to go electric.
US President Donald Trump has also challenged federal EV charging infrastructure money and blocked California’s ban on new gas-powered vehicle sales. It adds up to less pressure on carmakers to continue evolving their production away from gas-burning vehicles.
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General Motors, which had led the way among US carmakers with plans to convert production to an electric fleet of vehicles, said in a regulatory filing on Tuesday that it will have to book charges that include non-cash impairment and other charges of US$1.2 billion due to EV capacity adjustments.