GM Raises Outlook as Strong Truck Demand Dulls Tariff Pain

GM has seen a jump in sales of high-margin gas-powered SUVs and trucks. Photo by Bloomberg /hotographer: David Paul Morris/B

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(Bloomberg) — General Motors Co. raised its full-year outlook and posted third-quarter results that topped Wall Street estimates on better-than-expected pickup truck sales and fresh relief from the Trump administration’s tariffs on auto parts.

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Adjusted earnings before interest and taxes will be $12 billion to $13 billion in 2025, the automaker said in a statement on Tuesday. That’s up from a previous range of $10 billion to $12.5 billion. The improved outlook comes as GM has seen a jump in sales of high-margin gas-powered SUVs and trucks partly enabled by moves to ease federal emissions rules.

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Chief Executive Officer Mary Barra thanked President Donald Trump for extending through 2030 a tariff discount on some imports for carmakers that produce and sell completed automobiles in the US in a letter to shareholders and on a conference call with analysts. 

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“We appreciate the administration’s ongoing support for American innovation and jobs, and we look forward to progress on trade deals with countries like Canada and Mexico,” she said on the call. 

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Shares of the Detroit-based manufacturer rose 10% to $63.82 as of 9:35 a.m. in New York, trading at the highest levels since January 2022. The stock is up about 19% this year.

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Chris McNally, an analyst at Evercore, highlighted GM’s prediction next year’s earnings may be even stronger than in 2025, signaling bullish momentum. “Not sure what anyone could possibly even nitpick about this,” he said in a research note.

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The forecast shows how GM is managing disruption from the White House in areas ranging from emission penalties and electric vehicle subsidies to levies on imports of components and vehicles. Those changes have hurt profits and further undercut an already wavering initiative to electrify GM’s fleet by 2035 in a bid to better compete with Tesla Inc. and fast-growing Chinese rivals. Earlier this month, GM said it booked a one-time charge of $1.6 billion to restructure its struggling EV business. 

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GM Chief Financial Officer Paul Jacobson told analysts on the conference call that capital spending will be “at the lower end” of a $10 billion to $11 billion guidance range as it recalibrates spending due to the shifts in tariff policy and production plans.

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Separately, GM announced that it would end production of its BrightDrop electric delivery van at a plant in Ontario, Canada, which had been suspended since May.

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Best Since 2007

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Adjusted profit in the three months to Sept. 30 came to $2.80 per share, the company said, surpassing analysts’ consensus for $2.27 a share but falling short of the $2.96 per share it reported a year ago — and before the implementation of Trump’s trade agenda. 

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While revenue fell slightly to $48.6 billion in the quarter, net income fell by more than half to $1.3 billion due in part to higher costs from tariffs. But GM revised its tariff impact downward by $500 million this year, forecasting a range of $3.5 billion to $4.5 billion in additional costs. Share buybacks have mitigated the impact on earnings per share.

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In its core North American business, GM is seeing strong demand for its largest trucks and SUVs, helping to boost profits. The company said it had its best year-to-date sales since 2018 for its Silverado truck and the best first nine months for the full-size Escalade SUV since 2007. It notched its best-ever sales for its GMC brand, which sells high-end trucks and SUVs.