General Motors will take a $1.6bn hit in the third quarter as it reshapes its electric vehicle strategy following the scrapping of a key federal incentive that is likely to dampen demand .

The carmaker, based in Detroit, Michigan in the US, announced the news on Tuesday.

The company’s disclosure is one of the clearest indications yet that United States automakers are scrambling to adapt their production plans in response to slowing demand for electric vehicles (EVs) .

The EV market also faces fresh strain after the administration of US President Donald Trump scrapped a $7,500 federal tax credit for electric vehicles, a key industry support, with auto executives warning of a sharp near-term drop in battery-car sales before an eventual rebound.

In a filing, GM said it expects “the ad

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