General Motors (GM) will report its third-quarter earnings before the opening bell Tuesday morning as the largest of the Detroit Three automakers grapples with President Trump’s auto tariffs and a changing electric vehicle business.
GM is expected to post first-quarter revenue of $45.16 billion according to Bloomberg consensus, down 7% from a year ago. Analysts expect GM to post first-quarter adjusted earnings per share of $2.27, with adjusted net income of $2.25 billion.
GM’s revenue decline is not the result of a lack of sales. GM said third-quarter sales reached 710,347, an increase of 8% compared to a year earlier. The automaker said it was No. 1 in overall U.S. sales and had its best market share since 2017.
Gasoline-powered vehicles, including its pickup trucks like the Chevrolet Silverado and full-size SUVs like the GMC Yukon, boosted profits. Both categories are poised to lead the industry into the end of the year, GM said.
Not surprisingly, GM’s EV sales increased in the third quarter before the expiration of the $7,500 federal EV tax credit, reaching a record 66,501 units sold in the quarter.
But the electric vehicle business is expected to slow somewhat after the tax credit expires.
The automaker said last week that it will take a $1.6 billion charge for a reevaluation of its electric vehicle plans, of which $1.2 billion of the impact will be non-cash special charges resulting from adjustments to its electric vehicle capacity. The other $400 million in cash is primarily related to contract cancellation fees and commercial agreements associated with electric vehicle-related investments, GM said.
The other big problem looming for GM is exposure to tariff costs.
Read more: The latest news and updates on Trump’s tariffs
Last spring, the automaker lowered its full-year guidance to include a possible $4 billion to $5 billion impact from auto tariffs, though in the summer, after reporting its second-quarter results, GM confirmed its guidance and said the projected tariff impact would remain unchanged.
GM currently forecasts full-year EBIT in the range of $10 billion to $12.5 billion, with net income attributable to shareholders of $8.25 billion to $10 billion, and adjusted automotive free cash flow between $7.5 billion and $10 billion.
In an effort to combat the effect of tariffs and boost American production, GM committed $4 billion to expand its manufacturing capabilities in the United States.
GM’s blows to its guidelines and increased spending are taking a toll on other American manufacturers, including Ford (F), Tesla (TSLA), and even foreign automakers like Toyota (TM) that build in USMCA countries like the United States, Canada and Mexico.
Anderson Economic Group reported that tariffs on cars and parts from Canada and Mexico cost automakers more than $6 billion this summer and will surpass $10 billion in total by the end of this month.