General Motors reported second-quarter earnings Tuesday that beat Wall Street’s estimates and affirmed its full-year guidance, despite ongoing uncertainty from President Donald Trump’s auto tariffs.
Shares of the company fell about 6% in early trading.
While automakers have been hoping for relief on tariffs, Trump’s 25% levies on imported vehicles and many auto parts remain in effect.
In May, the automaker lowered its full-year guidance to include a possible $4 billion to $5 billion impact from auto tariffs. It affirmed that guidance on Tuesday and said the estimated tariff impact remains unchanged.
“In addition to our strong underlying operating performance, we are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape,” GM CEO Mary Barra said in a letter to shareholders. She added that the Detroit automaker was working to “greatly reduce our tariff exposure.”
CFO Paul Jacobson said during an interview on “Squawk Box” on Tuesday that tariffs impacted GM’s second quarter by $1.1 billion, which is in line with GM’s earlier expectations as part of the full-year impact.
He added on the company’s earnings call with analysts that its Korea business accounts for $2 billion of the total expected tariff hit for the year.
Mary Barra speaks onstage during WSJ’s Future of Everything 2025 at The Glasshouse on May 28, 2025 in New York City.
Dia Dipasupil | Getty Images
The company said in the spring that its guidance took into account changes the Trump administration made to tariffs, which include reimbursing automakers for some U.S. parts and reducing the “stacking” of tariffs on one another for the industry.
GM said it is making solid progress toward mitigating at least 30% of its expected cost increases due to tariffs through manufacturing adjustments, targeted cost initiatives and consistent pricing. It noted that the second half of the year will be more exposed to tariffs since it will have two quarters subject to Trump’s tariffs, while the first six months of the year only had one quarter affected.
Jacobson said on CNBC’s “Squawk Box” that the automaker does not expect any specific price increases related to tariffs.
Here’s how the company performed in the second quarter, compared with average estimates compiled by LSEG:
- Earnings per share: $2.53 adjusted vs. $2.44 expected
- Revenue: $47.12 billion vs. $46.28 billion expected
GM’s second-quarter results included net income attributable to stockholders of $1.9 billion, down 35.4% from $2.93 billion a year earlier.
Adjusted earnings before interest and taxes came in at $3.04 billion, a 31.6% decrease from $4.44 billion last year, but exceeding StreetAccount estimates of $2.89 billion.
The automaker reported adjusted earnings per share of $2.53, down 17% from $3.06 a year earlier. Its revenue for the second quarter was down 1.8% compared with $47.97 billion a year earlier. Both year-over-year declines mark the company’s first since the fourth quarter of 2023, with the revenue decrease also reflecting the biggest year-over-year drop since the fourth quarter of 2021.
GM’s North America margin, adjusted for earnings before interest and taxes, of 6.1% is down 44% from 10.9% a year ago
Amid the trade uncertainty, GM is trying to counter tariff risks. Last month, the company announced it will invest $4 billion in several American plants, including moving or increasing production of two Mexican-produced vehicles to U.S. plants. The company also said last week it will move production of a gas-powered SUV and add manufacturing of pickup trucks to its home state of Michigan.
The company’s full-year guidance, which it modified in May due to tariffs, includes adjusted EBIT of between $10 billion and $12.5 billion, down from its January guidance, which did not take tariffs into account, of $13.7 billion to $15.7 billion.
GM’s yearly outlook also includes net income attributable to stockholders of $8.25 billion to $10 billion, down from $11.2 billion to $12.5 billion earlier this year, and adjusted automotive free cash flow between $7.5 billion and $10 billion, down from between $11 billion and $13 billion prior to the tariffs.
GM reported 974,000 vehicle sales in the second quarter, less than the 1 million estimated by StreetAccount. Its electric vehicle sales totaled 46,300 for the quarter and the company said it has become the No. 2 EV manufacturer in the U.S.
During Tuesday’s earnings call with analysts, Barra said GM’s focus as it relates to electric vehicles is on reaching and improving on profitability. Trump’s new tax-and-spending bill, which he signed into law on July 4, is set to end the $7,500 tax credit for new electric vehicles and $4,000 credit for used EVs after Sept. 30.
Jacobson said he expects a rush on EVs before the Sept. 30 expiration. After that, he said he expects slower demand for EVs.
“While we anticipate headwinds to EV profitability from lower volume due to the recent removal of government incentives, we remain focused on controlling what we can,” Jacobson said on the call, adding that the automaker anticipates the changes in legislation to have a minimal impact on its 2025 results.
While GM initially set a goal to exclusively offer EVs by 2035, it has since said that consumer demand, which has been slower than expected, will dictate its EV plans.
