Following a second quarter that met analysts’ expectations, General Motors has confirmed its 2025 forecast, including the impact of the Trump administration’s import tariffs.
In the second quarter of this year, turnover was $47.1 billion (-1.8%), while the net profit decreased by 35.4% to $1.89 billion. The manufacturer has estimated the impact of the import tariffs on its business to be $1.1 billion.
Higher import tariffs on steel and aluminum also affected the figures. GM estimates the impact of the tariffs on its financial results to be around $4 to $5 billion for the entire year of 2025.
Adaptation
GM aims to absorb 30% of the cost of import tariffs by reducing overall costs and optimizing its production processes. In May, the company lowered its profit forecast for 2025, but has since maintained it, now that the figures for Q2 are known.
GM CEO Mary Barra: “I believe everything we’re doing strategically and proactively, along with closer alignment of emission rules with consumer demand, will further differentiate us from our competitors, increase our resilience, and help us emerge from this transition period even stronger and more profitable than before.”
“Tariffs are a big story for us,” CFO Paul Jacobson said on CNBC. “We’re in a bit of an adjustment phase right now, but I think the team is firing on all cylinders.”
In June, GM announced plans to invest approximately $4 billion in building more gasoline-powered vehicles at three US plants. Those moves include adding production of the Chevrolet Equinox compact crossover at a plant in Kansas and moving production of the Chevrolet Blazer midsize crossover from Mexico to Spring Hill, Tennessee.
Focusing on EV profitability
The automaker is now working to improve the cost and profitability of electric vehicles. Engineers are focusing on developing lighter and more aerodynamic vehicles that will enable smaller batteries, and the company is standardizing the use of electric motors across its lineup, Jacobson said.
GM is working on improvements to battery chemistry, designed to reduce cell and vehicle costs. It aims to commercialize lithium manganese-rich cells by 2028, starting with pickups and full-size SUVs, and will build lithium iron phosphate cells at its Tennessee joint-venture plant with LG Energy Solution.
Federal $7,500 tax credits that supported new EV purchases are set to end in September, following another controversial decision of the trump administration.
“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 told analysts. “These efforts are essential to improving our EV profitability and are critical to supporting the company’s long-term success.”
China restructuring
GM reported a China equity income of $71 million, versus a loss of $104 million a year earlier. The automaker has been working to restructure its China operations as part of a 50-50 joint venture with SAIC Motor Corp.
It was the second straight quarter of year-over-year sales gains in China, Barra wrote to shareholders, highlighting the company’s new-energy vehicle lineup there.
“We have been working closely with our JV partner to improve sales, inventory management, costs, and profitability,” she told analysts.
