General Motors says that it now expects to take a $1.6 billion earnings hit for the third quarter, as the automaker faces slowing demand for electric vehicles following the Trump administration's move to do away with tax credits for EV purchases.

Federal EV tax credits worth up to $7,500 for new EVs and $4,000 for used vehicles expired on September 30. In anticipation of the impact that's expected to have on sales, GM estimates that it will have to absorb a $1.2 billion accounting charge for adjustments to its EV production capacity, as well as an additional $400 million hit for canceling supplier contracts tied to EV investments, The New York Times reports. The company also warned in an October 14 filing with the Securities and Exchange Commission that it's "reasonably possible" that there could be more charges at some point down the line.

In its filing, GM said that it expects the adoption rate of EVs to slow following the end of federal tax credits, and the Trump administration's easing of emissions standards, although a planned joint venture with LG to build low-cost batteries in Tennessee and Ohio is expected to move forward as planned. The automaker has faced ballooning costs from White House tariffs as well, with GM projecting a $5 billion hit from the levies by the end of 2025.