When the CEO of General Motors has to front-load a letter to investors with a thank-you note to President Donald Trump "for his support of the U.S. automotive industry," you know that the road ahead is about to get bumpy.
In her note, CEO Mary Barra had plenty of good news to offer about the first quarter of 2025. Overall revenue at GM is up 2.3% compared to the same period last year. The Detroit automaker continues to make improvements to electric-vehicle profitability, something that continues to be elusive for much of the global auto industry, and she said that GM now claims the coveted number-two electric automaker status in the U.S. behind Tesla. Chevrolet, Barra wrote, is now the fastest-growing EV brand in America. Barra also reaffirmed that GM is now the largest battery cell manufacturer in the U.S.
"Importantly, GM’s business is growing and fundamentally strong as we adapt to the new trade policy environment, further strengthen our supply base, and drive EV profitability," Barra wrote. GM's overall car sales were up 17% year-over-year.
But then there's the predicted impact from Trump's tariffs on foreign-made cars and auto parts, which Barra said will hit GM's bottom line this year to the tune of $4 to $5 billion. That means GM is lowering its predicted annual earnings for 2025.
"Incorporating the positive impact of the administration’s actions this week, we are updating our full-year adjusted guidance to a range of $10 billion to $12.5 billion, including a current tariff exposure of $4 billion to $5 billion," Barra wrote, referring to Trump's plan to reduce tariffs somewhat before they go into effect.
As InsideEVs noted yesterday, most industry experts note that this reduction won't be enough to mitigate the multi-billion-dollar impact of more expensive components and vehicles as Trump attempts a shock-reshoring of American manufacturing jobs.
Nonetheless, the tariffs come at a time when GM and other automakers are investing billions of dollars into electrification, autonomous driving and other future-facing technologies—and increased costs and trade uncertainty will almost certainly impact their ability to do that. Meanwhile, China's auto industry races ahead with advanced EVs of its own, including expansions into other global markets like Europe and Latin America.
And even with GM's EV sales success, like other automakers, it seems to be preparing for a flatter overall of growth. Barra said that despite the wins it's seen with the Chevrolet Equinox EV and Cadillac Lyriq in particular, it plans to "[moderate] EV production to ensure that we stay aligned with the consumer demand, to avoid the heavy discounts our competitors offer," Barra said. "This will reduce our scale-driven profitability improvement, but we need to follow the consumer."
Contact the author: patrick.george@insideevs.com
