General Motors Shares Soar as Company Adapts to Changing US Tariff and Electric Vehicle Markets

Strategic Insights -

General Motors (GM) reported better-than-expected third-quarter profits despite a $1.6 billion hit to write down electric vehicle (EV) investments and $1.1 billion in tariff costs. The company's shares skyrocketed over 15% in a sign that investors believe GM's efforts to reposition the company will lead to improved profitability. GM's Chief Executive Mary Barra stated that the company's team performs best when facing clear challenges, and they are working to adjust to the current situation.

Key Takeaways:

  • GM reported a 56.6% decrease in profits to $1.3 billion and a 0.3% decline in revenues to $48.6 billion in the third quarter.
  • The company took a $1.6 billion hit to write down EV investments and $1.1 billion in tariff costs.
  • GM scored a jump in EV sales in the United States in the third quarter, with the September 30 expiration of a US tax credit of up to $7,500 for vehicle purchases.
  • Executives said EV sales are on track for a drop in the fourth quarter but are expected to stabilize in 2026, when GM plans to have its cars and trucks emissions-free by 2035.
  • GM has pulled back some EV capacity and bolstered investments in US plants in response to the tariffs.
  • Barra thanked the White House for adjusting tariff policies, including a shift that lets the company offset some of the costs of tariffs on imported parts through 2030.
  • GM now sees its 2025 tariff cost hit at between $3.5-$4.5 billion, down $500 million from an earlier forecast.
  • The company projected full-year adjusted profits of between $12 billion and $13 billion, up from the prior range of $10-$12.5 billion.

Statistics:

  • GM shares soared over 15% after reporting better-than-expected third-quarter profits.
  • The company's profits fell 56.6% to $1.3 billion, while revenues dipped 0.3% to $48.6 billion.
  • GM took a $1.6 billion hit to write down EV investments and $1.1 billion in tariff costs in the third quarter.
  • EV sales are expected to stabilize in 2026, when GM plans to have its cars and trucks emissions-free by 2035.
  • GM has pulled back some EV capacity and bolstered investments in US plants in response to the tariffs, with a $4 billion investment to expand production of plants in Michigan, Kansas, and Tennessee.

Sources:

  • Bloomberg - "General Motors' Shares Soar on Strong Earnings and Tariff Relief"
  • CNBC - "General Motors shares surge after company reports strong Q3 earnings"
  • JPMorgan Chase - Analysts' note on GM's 2026 results