Core profits of General Motors (GM) fell 32% to $3 billion in the second quarter, the company reported on Tuesday, as the automaker continued to confront challenging tariff policies, which it said took $1.1 billion from the results.
The largest U.S. automaker by sales said it expects the tariff impact to worsen in the third quarter and stuck to a previous estimate that trade headwinds threaten to hit the bottom line by $4 billion to $5 billion. GM said it could take steps to mitigate at least 30% of that impact.
The automaker's revenue for the quarter ended June 30 fell nearly 2% to approximately $47 billion from the same period a year ago. Its quarterly adjusted earnings per share fell to $2.53 compared with $3.06 a year earlier. Analysts on average expected adjusted profit of $2.44 per share, according to data compiled by LSEG.
Shares fell about 3% in premarket trade. GM was among corporations that revised annual guidance due to the impact of President Donald Trump's tariffs, lowering it to a yearly adjusted core profit of between $10 billion and $12.5 billion. The company stood by that forecast on Tuesday.
Beyond tariffs, GM's underlying business in the quarter was solid. Sales in the U.S. market, its main profit center, rose 7%, while the company continued to command strong pricing on its pickup trucks and SUVs. GM swung back to a small profit in China, after losing money there the previous year.
Jeep-maker Stellantis warned on Monday that tariffs would significantly impact its results in the second half of 2025, stating that the tariffs cost it approximately 300 million euros.
The automaker has taken several steps in recent months to bolster its combustion-engine operations through increased investment in its U.S. factory base, raising questions about its goal of ending the production of gas-powered cars and trucks by 2035.
GM announced in June that it would invest $4 billion at three U.S. facilities in Michigan, Kansas and Tennessee, including a plan to move production of the Cadillac Escalade and its two big pickup trucks to Michigan.
Automakers are increasingly shifting their focus to bolstering the core lineup of gas trucks and SUVs, as the growth rate of EV sales has slowed. Demand for battery-powered models has already slowed after rapid growth earlier this decade.
The trend is intensified by the pending disappearance of government support for the battery-powered models. Sweeping tax and budget legislation approved by Congress will eliminate $7,500 tax credits for buying or leasing new electric vehicles and a $4,000 tax credit for used electric vehicles at the end of September.
Trump also signed tax and budget legislation that eliminates fines for failures to meet fuel economy rules, a move that makes it easier to build more gas-powered vehicles.
