General Motors’ second-quarter core profit fell 32% to $3bn as a result of continuing challenges in the US government’s tariff policies, which said sapped $1.1bn from the result, the US carmaker said on Tuesday.
The biggest US vehicle manufacturer by sales expects the tariff impact to worsen in the third quarter and stuck to a previous estimate that trade headwinds threaten to cut $4bn-$5bn from the bottom line. GM said it could take steps to mitigate at least 30% of that impact.
The carmaker’s revenue in the quarter ended June 30 fell almost 2% from a year ago to about $47bn. Quarterly adjusted earnings per share fell to $2.53 from $3.06 a year earlier. Analysts on average expected adjusted profit of $2.44 a share, according to data compiled by LSEG.
GM shares fell about 3% in premarket trade.
The company was among multiple corporations that revised annual earnings guidance due to the impact from President Donald Trump’s tariffs, lowering annual adjusted core profit to between $10b and $12.5bn. The company on Tuesday stood by that forecast.
Besides tariffs, GM’s underlying business in the quarter was solid. Sales in the US market — its main source of profit — rose 7%, while the company continued to command strong pricing on its pickup trucks and SUVs. GM reported a small profit in China after losing money there a year earlier.
Jeep-maker Stellantis on Monday warned that tariffs would significantly affect results in the second half of 2025, and said tariffs cost it about €300m in the first half of the year. Shares of rival Ford and US-traded shares of Stellantis fell about 1% in premarket trading on Tuesday.
GM took several steps in recent months to bolster its combustion-engine operations through increased investment in its US factory base, calling into question its goal of ending the production of internal combustion engine (ICE)-powered cars and trucks by 2035.
In June the said it would invest $4bn at three US facilities, in Michigan, Kansas and Tennessee — including a plan to move production of the Cadillac Escalade and its two big pickup trucks to Michigan.
Carmakers are increasingly shifting their focus to bolstering the core line-up of ICE trucks and SUVs, as the growth rate of EV sales has slowed. Demand for battery-powered models has slowed already after rapid growth earlier this decade.
The trend is intensified by the pending removal of government support for the battery-powered models. Sweeping tax and budget legislation approved by the US government will eliminate $7,500 tax credits for buying or leasing new electric vehicles and a $4,000 used-EV credit at the end of September.
Trump also signed tax and budget legislation that eliminates fines for failures to meet fuel economy rules, a move that makes it easier to build more ICE-powered vehicles.
Reuters
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