Detroit automaker General Motors (GM) has warned that its upcoming third-quarter results will include a $1.6 billion U.S. charge from its electric vehicle (EV) division.
GM, as the company is known, said that $1.2 billion U.S. of the financial impact will be a non-cash, special charge due to an adjustment to its electric vehicle capacity.
The other $400 million U.S. in cash is the result of contract cancellation fees and commercial settlements associated with electric vehicle-related investments, according to the company.
General Motors also said that it continues to reassess its electric vehicle manufacturing plans, signaling additional charges could be announced in future quarters.
The latest charge will be reported as a special item when GM reports its third quarter numbers on Oct. 21 of this year.
The vehicle manufacturer has invested billions of dollars in an electric vehicle market that has softened in recent years as consumers choose more affordable gas-powered cars and trucks.
At one-point, General Motors was planning to invest $30 billion U.S. by this year in electric vehicles, including batteries. However, those plans have since been scaled back.
The recent end of a $7,500 U.S. federal tax credit for electric vehicle purchases is expected to further dampen sales moving forward.
General Motors has made some gains in electric vehicle sales, but the size of the market is small compared with expectations at the beginning of the decade.
GM stock has gained 8% this year to trade at $55.62 U.S. per share.
