By Nora Eckert and Nathan Gomes
(Reuters) -General Motors lifted its financial outlook for the year and slightly lowered its expected hit from tariffs, as the automaker awaits expected relief on tariffs in the U.S. while confronting a weakening market for electric vehicles.
The company now expects its annual adjusted core profit to be between $12.0 billion to $13.0 billion, compared with its prior estimate of $10.0 billion to $12.5 billion. The Detroit automaker said tariffs would hit its bottom line less than anticipated, lowering its updated impact to a range of $3.5 billion to $4.5 billion, from a previous $4 billion to $5 billion.
Shares rose about 10% in premarket trading. GM’s outlook hike lifted crosstown peer Ford about 3% and U.S.-listed shares of Stellantis roughly 1% in premarket trade.
EARNINGS TOP WALL ST EXPECTATIONS
GM’s quarterly adjusted earnings per share dropped to $2.80, beating LSEG analysts’ expectation of $2.31.
The auto giant earlier this month took a $1.6 billion charge from changes to its EV strategy. At the end of September, a $7,500 tax credit on battery-powered models went away, and there has been further loosening of regulations around vehicle emissions.
In a letter to shareholders, GM CEO Mary Barra said the company focused on EV investments to meet stringent federal requirements, which U.S. President Donald Trump has since largely unraveled. She expects the company to incur future charges related to EVs, although she said the vehicles remain its “North Star.”
“It is now clear that near-term EV adoption will be lower than planned,” Barra said, citing changing regulations. “By acting swiftly and decisively to address overcapacity, we expect to reduce EV losses in 2026 and beyond,” she added.
Revenue for the quarter ended September marginally fell to $48.6 billion from a year earlier.
U.S. car sales have stayed strong despite uncertainty around the tariffs, rising 6% in the third quarter. While automakers have largely avoided raising sticker prices to offset their tariff costs, American car shoppers have continued to opt for pricier models and added features.
TARIFF RELIEF FOR U.S. AUTO INDUSTRY
GM said it plans to mitigate 35% of its anticipated tariff hit. There is relief on the horizon for many U.S. automakers, after Trump approved an order to expand credits for U.S. auto and engine production, allowing companies to receive a credit equal to 3.75% of the suggested retail price for U.S. assembled vehicles through 2030 to offset import tariffs on parts.
“I also want to thank the President and his team for the important tariff updates they made on Friday. The MSRP offset program will help make U.S.-produced vehicles more competitive over the next five years,” Barra said in a letter to shareholders.
