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Released October 20, 2025 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--As General Motors (Detroit, Michigan) anticipates a slowdown in U.S. electric vehicle (EV) sales as a result of the expiration of the federal $7,500 consumer tax credit, the automaker said it is reassessing its EV investment strategy.
In a regulatory filing last week, GM said it would take a $1.6 billion charge in the third quarter as it shifts its EV strategy--$1.2 billion "as a result of adjustments to our EV capacity," and $400 million, "primarily related to contract cancellation fees and commercial settlements associated with EV-related investments."
"Following recent U.S. government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow ... the reassessment of our EV capacity and manufacturing footprint, including our investments in our battery component manufacturing, is ongoing," the company added.
News reporting, Quebec Economy Minister Christine Fréchett and GM have since confirmed one such project will be paused indefinitely: the second phase of GM and partner POSCO's (South Korea) joint-venture cathode active materials (CAM) production plant in Quebec, Canada. The first phase, which is expected to be completed and start production of CAM in 2026, will not be affected.
Cathode active materials are made from a mix of elements such as nickel sulfate or lithium cobalt and are responsible for storing and releasing lithium ions during the charging and discharging of a battery.
Fréchett was in Quebec last week for an event unrelated to the project development, when she said, "my hope is that this pause will be of a limited duration, and that in the near future we'll be able to relaunch the project."
As a result of the pause, Vale S.A. (Rio de Janeiro, Brazil) punted on its plans to build a nickel sulfate production plant that would have supplied the second phase of GM's plant. In a statement to The Canadian Press, Vale said GM "will not need nickel sulfate in Quebec at this time."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read more information on the first phase and now-paused second phase of GM's plant, and click here for a project report on Vale's cancelled project.
In an emailed statement to the Financial Post, a GM spokesperson said the company's "long-term strategy is to build a profitable EV business in North America and in light of evolving market dynamics, GM and our partners will pause the second phase of the project."
GM initially planned to reach a production capacity of 1 million EVs by the end of 2025 and phase out gas- and-diesel powered engines and go all-electric by 2035, but Chief Executive Officer Mary Barra indicated earlier this year that is not practical.
In addition, GM is investing $888 million to support production of gasoline- and-diesel-powered V-8 engines, its largest single investment in an engine plant. Subscribers can read the related project report and plant profile. For additional information on this and GM's EV strategy, see May 30, 2025, article - GM to Invest $888 Million to Build Gasoline-Powered Engines.
At a September 30 company event, Ford (Dearborn, Michigan) Chief Executive Officer Jim Farley echoed GM's stance regarding the end of the $7,500 federal tax credit, saying he expected demand for EVs in the U.S. to be cut in half in October as a result.
The policy change, he said, will cause automakers to adjust battery plant investments and production capacity.
Last month, Ford said it was delaying the launch of two EVs: a full-size electric pickup to be assembled at its BlueOval City complex in Stanton, Tennessee, to 2028, and its E-transit van to be assembled in Avon Lake, Ohio, from 2026 to 2028. Ford said it "will be nimble in adjusting our product launch timing to meet market needs and customer demand while targeting improved profitability." Subscribers can read the related project reports and plant profiles.
According to data from Cox Automotive, citing Kelly Blue Book estimates, U.S. EV sales in the third quarter reached an all-time quarterly high as the federal EV tax credit was phasing out: 438,487 units was up 40.7% from the second quarter and 29.6% year over year. In addition, EVs accounted for 10.5% of total vehicle sales in the third quarter, also a new record, and an increase from the 8.6% share in the same period last year.
But Cox Automotive's Director of Industry Insights Stephanie Valdez Streaty further pointed to a cautious market outlook: "The federal tax credit was a key catalyst for EV adoption, and its expiration marks a pivotal moment. This shift will test whether the electric vehicle market is mature enough to thrive on its own fundamentals or still needs support to expand further."
To that point, Cox Automotive forecasted EV sales will drop "notably" in Q4 "and through the early months of 2026."
Still, Streaty said electrified vehicles--hybrids, plug-in hybrids and pure EVs--are the future, although growth moving forward will be slower than many hoped.
Uncertainty in the U.S. EV market has not scared off one major project underway from GM and project partner Samsung SDI, a unit of Samsung (South Korea): a $3.5 billion battery manufacturing plant in Indiana with a capacity of 30 gigawatt-hours (GWh) per year of batteries, with production expected to begin in 2028. Subscribers can click here for the project report.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
In a regulatory filing last week, GM said it would take a $1.6 billion charge in the third quarter as it shifts its EV strategy--$1.2 billion "as a result of adjustments to our EV capacity," and $400 million, "primarily related to contract cancellation fees and commercial settlements associated with EV-related investments."
"Following recent U.S. government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow ... the reassessment of our EV capacity and manufacturing footprint, including our investments in our battery component manufacturing, is ongoing," the company added.
News reporting, Quebec Economy Minister Christine Fréchett and GM have since confirmed one such project will be paused indefinitely: the second phase of GM and partner POSCO's (South Korea) joint-venture cathode active materials (CAM) production plant in Quebec, Canada. The first phase, which is expected to be completed and start production of CAM in 2026, will not be affected.
Cathode active materials are made from a mix of elements such as nickel sulfate or lithium cobalt and are responsible for storing and releasing lithium ions during the charging and discharging of a battery.
Fréchett was in Quebec last week for an event unrelated to the project development, when she said, "my hope is that this pause will be of a limited duration, and that in the near future we'll be able to relaunch the project."
As a result of the pause, Vale S.A. (Rio de Janeiro, Brazil) punted on its plans to build a nickel sulfate production plant that would have supplied the second phase of GM's plant. In a statement to The Canadian Press, Vale said GM "will not need nickel sulfate in Quebec at this time."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read more information on the first phase and now-paused second phase of GM's plant, and click here for a project report on Vale's cancelled project.
In an emailed statement to the Financial Post, a GM spokesperson said the company's "long-term strategy is to build a profitable EV business in North America and in light of evolving market dynamics, GM and our partners will pause the second phase of the project."
GM initially planned to reach a production capacity of 1 million EVs by the end of 2025 and phase out gas- and-diesel powered engines and go all-electric by 2035, but Chief Executive Officer Mary Barra indicated earlier this year that is not practical.
In addition, GM is investing $888 million to support production of gasoline- and-diesel-powered V-8 engines, its largest single investment in an engine plant. Subscribers can read the related project report and plant profile. For additional information on this and GM's EV strategy, see May 30, 2025, article - GM to Invest $888 Million to Build Gasoline-Powered Engines.
At a September 30 company event, Ford (Dearborn, Michigan) Chief Executive Officer Jim Farley echoed GM's stance regarding the end of the $7,500 federal tax credit, saying he expected demand for EVs in the U.S. to be cut in half in October as a result.
The policy change, he said, will cause automakers to adjust battery plant investments and production capacity.
Last month, Ford said it was delaying the launch of two EVs: a full-size electric pickup to be assembled at its BlueOval City complex in Stanton, Tennessee, to 2028, and its E-transit van to be assembled in Avon Lake, Ohio, from 2026 to 2028. Ford said it "will be nimble in adjusting our product launch timing to meet market needs and customer demand while targeting improved profitability." Subscribers can read the related project reports and plant profiles.
According to data from Cox Automotive, citing Kelly Blue Book estimates, U.S. EV sales in the third quarter reached an all-time quarterly high as the federal EV tax credit was phasing out: 438,487 units was up 40.7% from the second quarter and 29.6% year over year. In addition, EVs accounted for 10.5% of total vehicle sales in the third quarter, also a new record, and an increase from the 8.6% share in the same period last year.
But Cox Automotive's Director of Industry Insights Stephanie Valdez Streaty further pointed to a cautious market outlook: "The federal tax credit was a key catalyst for EV adoption, and its expiration marks a pivotal moment. This shift will test whether the electric vehicle market is mature enough to thrive on its own fundamentals or still needs support to expand further."
To that point, Cox Automotive forecasted EV sales will drop "notably" in Q4 "and through the early months of 2026."
Still, Streaty said electrified vehicles--hybrids, plug-in hybrids and pure EVs--are the future, although growth moving forward will be slower than many hoped.
Uncertainty in the U.S. EV market has not scared off one major project underway from GM and project partner Samsung SDI, a unit of Samsung (South Korea): a $3.5 billion battery manufacturing plant in Indiana with a capacity of 30 gigawatt-hours (GWh) per year of batteries, with production expected to begin in 2028. Subscribers can click here for the project report.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
