General Motors Reports 35% Income Slide, What's Causing This Loss?

General Motors Reports 35% Income Slide, What's Causing This Loss? originally appeared on Autoblog.

Tariffs are impacting one of Detroit's mainstays

In financial statements released to shareholders before the opening bell of the New York Stock Exchange on July 22, General Motors reported a slew of red numbers. Since President Donald Trump began enforcing the tariffs on April 2, import tariffs have cost the Detroit automaker $1.1 billion. Its net income for the second quarter of 2025 dropped by 35% to $1.9 billion, its global revenue declined by 1.8% to $47.1 billion, its adjusted earnings before interest and taxes (EBIT) fell by 32% to $3.04 billion, and its pre-tax profit in North America fell by 46% to $2.4 billion on revenue of $39.5 billion.

The architecture of the Renaissance Center is framed by a footbridge and the monorail infrastructure.Roberto Machado Noa/LightRocket via Getty Images

Despite this, the automaker stated in its July 22 letter to shareholders that it is still maintaining its full-year financial results guidance, which it issued in May, projecting its EBIT to fall between $10 billion and $12.5 billion and its net income to fall between $8.2 billion and $10.1 billion. Currently, numbers are still down, and they project that tariffs will bite off another $4 billion to $5 billion this year.

Though the numbers side is shining red, CEO Mary Barra penned in GM's message to shareholders that the automaker is now "well positioned to succeed in an ICE market that now has a longer runway," adding that the company "will continue to drive improved overall profitability."

“I believe everything we’re doing strategically and proactively, along with closer alignment of emissions rules with consumer demand, will further differentiate us from our competitors, increase our resilience, and help us emerge from this transition period even stronger and more profitable than before,” Barra said.

Chevrolet Silverado 1500s and GMC Sierra 1500s on the assembly line at the General Motors assembly plant in Fort Wayne, Indiana, USGetty Images

GM is placing a big bet on its gas-powered cars, but imports jab at its bottom line

The messaging to its shareholders comes as General Motors is doubling down on its efforts to produce gas-powered cars. Back in June, GM announced plans to invest nearly $4 billion to build more gas cars in the U.S., including Chevrolet Equinox production at a Kansas plant and localizing production of the Chevy Blazer from Mexico to Spring Hill, Tennessee.

In July, General Motors confirmed reports that it will move production of the Cadillac Escalade to the Orion Assembly plant in Michigan, while also adding capacity for the gas-powered Chevrolet Silverado and GMC Sierra pickup trucks. Despite this, General Motors' Achilles heel is that it is paying 25% tariffs on some popular cars. These include USMCA-eligible pickup trucks assembled in Mexico and Canada, as well as low-cost compact crossover SUVs like the Chevrolet Trax and Buick Envista, which are imported from South Korea.

2025 Chevrolet EquinoxChevrolet

“Tariffs are obviously a big story for us,” General Motors CFO Paul Jacobson said on CNBC. “We’re in a bit of an adjustment phase right now, but I think the team is really firing on all cylinders.”

Despite the impact of tariffs on General Motors, Jacobson maintained that the automaker does not expect to raise prices and is working to maintain consistent pricing. He also told CNBC that its South Korea-built vehicles will remain profitable even with tariffs. So far, GM has not yet made long-term decisions about its manufacturing operations in South Korea.

“We’re going to continue to watch it,” he said. “In the meantime, it’s important to make sure that we keep the vehicles flowing for our customers.”

Final thoughts

Despite the tariff impact that General Motors has faced, it does have a huge advantage due to its extensive portfolio. As I have mentioned before, pickup trucks and full-size SUVs are some of the most profitable and best-selling vehicles for General Motors, and the first half of 2025 saw strong numbers for its pickups and full-size SUVs.

At this point, General Motors can lean on what sells, especially as CEO Mary Barra notes that "closer alignment of emissions rules with consumer demand will further differentiate us from our competitors."

General Motors Reports 35% Income Slide, What's Causing This Loss? first appeared on Autoblog on Jul 22, 2025

This story was originally reported by Autoblog on Jul 22, 2025, where it first appeared.