The $114 Billion EV Meltdown
GM, Ford, and other big car makers are waving white flags after huge losses and layoffs. We tallied the damage.
Just 21 months ago, General Motors CEO Mary Barra declared that “we believe in an all-electric future.” She went on to claim that the challenges her company was facing in the EV market were merely temporary bumps on the road to net-zero.
But as Bob Dylan famously observed, things have changed.
On January 8, GM announced it would take $7.1 billion in charges, of which $6 billion is due to Barra’s failed EV strategy. In a filing with the SEC, the company also warned that it would take more writedowns this year as part of a “strategic realignment of EV capacity.”
GM’s move came less than a month after Ford Motor Co. announced it was taking a $19.5 billion writedown on its EV business. As I explained on December 15, Ford has racked up a jaw-dropping $35.1 billion in losses on its EV misadventure. (Speaking of Ford, why does Jim Farley still have a job?)
Yes, global EV sales are rising. Some 20.7 million EVs were sold last year, up 20% over 2024. But those numbers are misleading. Why? Nearly two-thirds of those EVs were sold in China. Yes, China is leading the world in EV development and sales. But rather than take a measured approach to chasing China’s EV makers, US and European automakers bet tens of billions of dollars on the notion that they could beat the Chinese at their own game. To be sure, the big car companies were compelled to make massive bets on EVs by government mandates. But rather than push back against the mandates, they acquiesced. Further, they assumed that droves of car buyers would hand over the keys to their gasoline-fueled cars and rush to buy EVs.
They were wrong. And they are now grappling with a monster hangover.
The expiration of the lucrative $7,500 federal tax credit for EV buyers in the US, along with plummeting interest from car buyers, is forcing US and European automakers to return to their traditional vehicle lineup. Over the past few weeks, Jacob and I have been tallying the losses taken by some of the biggest automakers in the US and Europe. We analyzed financial and sales data from 2022 to 2025 for Ford, GM, Stellantis, Mercedes, and Volkswagen. We also included two pure-play EV makers, Rivian and Lucid.
Here’s what we found.
