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You are at:Home»Business»GM profit shrinks despite stronger sales
Business

GM profit shrinks despite stronger sales

Buddy DoyleBy Buddy DoyleJuly 23, 2025No Comments3 Mins Read
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GM profit shrinks despite stronger sales
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General Motors’ net income shrank 35% in the second quarter despite strong sales gains as President Trump’s automotive tariffs weighed on the largest automaker in the U.S.

Despite the drop in profit, GM’s results exceeded Wall Street estimates for revenue and adjusted operating income. The company maintained its previous profit guidance for 2025.

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.”

GENERAL MOTORS RECALLS 62,500 CHEVY SILVERADOS OVER BRAKE FIRE RISK

Tariffs hit GM’s operating income by $1.1 billion in the second quarter. The company’s net income of $1.8 billion was down from $2.9 billion in the second quarter of 2024. GM said few of its tariff “mitigation” efforts, such as making more vehicles at its U.S. factories, were fully implemented.

The company earlier this year said tariffs would add costs of $4 billion to $5 billion—about a third of its pretax profit last year—and that it aims to offset 30% of the tariff bill through actions like adjusting its manufacturing footprint.

GENERAL MOTORS IS HALTING EXPORTS OF VEHICLES TO CHINA

GM hasn’t implemented wide-scale price increases in response to tariffs, but Barra hasn’t ruled out raising prices, saying the company will stay competitive.

GM posted an industry-leading sales gain of 12% through the first half of the year, according to Cox Automotive. Sales for the industry as a whole were up 7% during the same period, Cox data show.  

American flag at chevrolet dealership

Trump in April imposed 25% tariffs on imported vehicles and on automotive parts, though he later softened the blow by exempting most parts from Canada and Mexico and allowing automakers to pay tariffs only on the non-U.S. content in their vehicles assembled in Canada and in Mexico.

GM imports roughly half the vehicles it sells in the U.S., including entry-level Chevrolets and Buicks manufactured in South Korea that have sticker prices under $30,000, as well as full-size trucks and electric vehicles made in Mexico and Canada.

Ticker Security Last Change Change %
GM GENERAL MOTORS CO. 48.88 -4.37 -8.20%

The small SUVs it produces in South Korea, such as the Chevy Trax, still cover their costs of production even with tariffs, GM has said.

The company has announced moves to shift a small share of production to the U.S., such as bringing the gas-powered Chevrolet Blazer SUV from a factory in Mexico to one in Spring Hill, Tenn.

“We’re trying to make changes to pay less tariffs because we’re strengthening our U.S. manufacturing,” Barra said during a Wall Street Journal event in May.

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