General Motors experienced a $1.1 billion tariff-related loss during the second quarter because U.S. trade policies increased their expenses despite the company achieving better-than-expected financial results. The company expects third-quarter tariff impacts to grow more severe while maintaining its annual tariff-related cost projection of up to $5 billion.
The company achieved strong earnings despite a tariff-related loss because of high demand for gasoline-powered trucks and SUVs. The U.S. market showed a 7% increase in sales alongside sustained strong pricing. The company reported adjusted earnings per share at $2.53 which fell below last year’s $3.06 but exceeded market expectations. The company experienced a 2% decline in revenue which reached $47 billion.
The company aims to reduce at least 30% of tariff expenses through cost reduction measures. The company will probably reduce its future project investments to maintain its profit margins according to analysts.
The company achieved profitability in China while announcing plans to spend $4 billion on U.S. manufacturing growth which includes moving Chevy Blazer production from Mexico to Tennessee.
The future prospects for GM’s electric vehicle strategy remain challenging. The combination of reduced government incentives and slower EV sales growth and President Trump’s fuel economy penalty rollback has led automakers to prioritize internal combustion engine vehicles.
The market reacted negatively to the results by sending shares down 6% while Ford and Stellantis also experienced declines because of increasing auto industry concerns about trade tensions.
