General Motors (GM) reported third-quarter revenue of $48.59 billion, surpassing analyst expectations and showing only a slight decrease from the previous year’s $48.76 billion. Adjusted earnings per share (EPS) reached $2.80, outperforming the anticipated $2.31, despite reflecting a 5% year-over-year decline.
While GM exceeded Wall Street’s estimates on key metrics, net income experienced a significant year-over-year drop due to major shifts in its electric vehicle (EV) strategy, ongoing tariff pressures, and targeted production adjustments. The automaker’s net income for the quarter stood at $1.32 billion—less than half of the prior year’s $3 billion. This decrease was directly impacted by changes in EV production, impairment charges from underutilized assets, and canceled supplier agreements.
Despite these challenges, GM raised the top end of its full-year net income guidance to $9.5 billion. Adjusted earnings before interest and taxes (EBIT) totaled $3.38 billion, a notable decline from $4.12 billion a year earlier.
GM’s market share reached 8.3%, the highest since 2017, as quarterly U.S. sales rose 8% to 710,347 units.
### Guidance Raised Amid Challenges
In response to positive factors, GM increased its full-year adjusted EBIT guidance to the $12 billion to $13 billion range, up from the previous $10 billion to $12.5 billion estimate. The company now expects adjusted automotive free cash flow to reach between $10 billion and $11 billion. Additionally, adjusted diluted EPS is projected to be between $9.75 and $10.50, exceeding spring estimates.
GM attributes these upward revisions partly to tariff mitigation strategies. The company now anticipates annual tariff costs for 2025 to be between $3.5 billion and $4.5 billion, down from spring forecasts of up to $5 billion.
### CEO Comments on Tariff Relief
CEO Mary Barra expressed gratitude toward President Donald Trump for recent tariff relief efforts specifically benefiting domestic manufacturers. These include new offset programs for vehicles made in the USA, which are expected to enhance competitiveness by lowering domestic manufacturing costs.
“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, and GM is very well positioned as we invest to increase our already significant domestic sourcing and manufacturing footprint,” Barra said.
### Core Strengths and EV Performance
GM’s core strength remains rooted in robust sales of gas-powered vehicles, including popular pickups such as the Chevrolet Silverado and GMC Yukon SUVs. Incentives stayed steady at just 4% of the average transaction price, well below the industry average.
The automaker’s electric vehicle division delivered a record 66,501 units, driven by federal tax credits. However, GM expects sales to moderate following the expiration of these tax credits.
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*For this story, Fortune used generative AI to assist with an initial draft. An editor verified the accuracy of the information before publishing.*
https://fortune.com/2025/10/21/general-motors-third-quarter-earnings-stock-surge-beats-expectations/
