General Motors Co. reported better-than-expected adjusted earnings for the second quarter of 2025 despite grappling with $1.1 billion in tariff-related costs.
However, its shares slipped 3.5% in premarket trading after the automaker warned that the third-quarter tariff impact would be even more severe.
The Detroit-based company said it remains on track to limit the damage from President Donald Trump’s auto tariffs, which were implemented in April and target imported vehicles and select automotive parts.
GM maintained its full-year tariff cost estimate at between $4 billion and $5 billion.
Despite the drag on profits, the second-quarter results beat Wall Street expectations for both revenue and adjusted earnings.
In a letter to shareholders, Chief Executive Mary Barra said GM is “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 earnings fall, but sales and market share climb
GM’s net income fell 35% to $1.9 billion, or $1.91 per share, from $2.9 billion, or $2.55 per share, a year earlier.
Adjusted earnings came in at $2.53 per share, down from $3.06, but ahead of analysts’ average estimate of $2.32, according to FactSet.
Revenue slipped slightly to $47.1 billion from $48 billion a year ago, but again exceeded analyst expectations of $45.84 billion.
The company retained its full-year adjusted earnings guidance of $8.25 to $10 per share, in line with Wall Street projections.
GM also reported solid vehicle sales gains. Total global deliveries rose to 1.54 million units, up from 1.43 million a year earlier.
North American deliveries climbed 7.3% to 747,000 units.
The automaker captured 17.4% of the U.S. market in the quarter, a 0.7 percentage point gain.
Electric vehicle sales were a standout, jumping 111%. GM said it now commands a 16% share of the US EV market, with Cadillac emerging as the country’s top-selling luxury EV brand.
Price hikes, production shifts to ease tariff pressure
GM is taking steps to offset about a third of its total expected tariff burden through what it called “manufacturing adjustments, targeted cost initiatives and consistent pricing.”
That includes plans to raise vehicle prices in North America by 0.5% to 1%.
“We’re trying to make changes to pay less tariffs because we’re strengthening our U.S. manufacturing,” Barra said in May.
One such move is the relocation of Chevrolet Blazer production from Mexico to a plant in Tennessee.
GM imports about half the vehicles it sells in the US, including affordable Chevrolets and Buicks from South Korea and electric models assembled in Mexico and Canada.
Many of these vehicles remain viable despite the tariffs. For instance, GM said small SUVs like the Chevy Trax, made in South Korea, still cover their costs.
Earlier, Trump had softened the tariff blow by exempting most auto parts from Canada and Mexico and limiting levies to non-US content in vehicles assembled in those countries.
But GM has still felt a significant impact.
Looking ahead, the automaker reaffirmed its plans to jointly manufacture prismatic battery cells with LG and introduce new battery chemistries —LMR and LFP— by 2027, as part of its long-term electrification strategy.
The post GM stock drops 3.5% as warning of steeper Q3 tariff hit offsets earnings beat appeared first on Invezz
