GM pulls back on EVs
General Motors’ third-quarter net income tumbled by 57 per cent to US$1.3 billion – or about NZ$2.27b – because of a one-time charge tied to scaling back its electric-vehicle manufacturing plans.
However, the company has raised its earnings forecast for 2025 and says import tariffs will be less costly than first anticipated.
Chief executive officer Mary Barra says the higher full-year guidance reflects “our confidence in the company’s trajectory.”
GM’s adjusted earnings before interest and taxes declined 18 per cent to US$3.4b in the third quarter, while global revenue was flat at US$48.6b. North American pre-tax earnings slid 37 per cent to US$2.5b and revenue slipped 1.5 per cent to US$40.6b.
The company is taking US$1.6b in charges against its third-quarter earnings for the reassessment of its EV capacity. The end of a US$7,500 federal tax credit that had supported sales of new electric cars in the US is one reason “near-term EV adoption will be lower than planned”, says Barra.
She adds: “The work, which is ongoing, resulted in a special charge in the third quarter and we expect future charges. By acting swiftly and decisively to address overcapacity, we expect to reduce EV losses in 2026 and beyond.”
The carmaker now expects a longer runway for its profitable internal-combustion models as the transition to EVs slows. It plans to invest US$4b at three US assembly plants to expand output of petrol-powered vehicles by the end of 2027.
It’s one strategy GM is employing to offset the impact of tariffs on imported vehicles and parts. The company previously said tariffs would cost between US$4b and US$5b this year before efforts to mitigate some of the effects.
GM said it now expects to pay from US$3.5b-US$4.5b, assuming current rates are maintained, and to offset about 35 per cent of that cost.
President Donald Trump recently extended a tariff offset equal to 3.75 per cent of the aggregate sticker price of vehicles carmakers assemble in the US until April 2030. That had been set to fall to 2.5 per cent next year before being phased out in 2027. Similar relief is expected to follow for American-built engines.
