General Motors recorded a 6.6-percent drop in net profit in the first quarter of 2025. The auto giant also announced that its forecast for the year is no longer reliable. The reason? The uncertainty created by the new tariffs imposed by the Trump administration.
Mixed financial results despite increased revenue
For the quarter ended March 31, GM's net income fell to $2.8 billion USD, while revenues increased by 2.3 percent to $44.02 billion. The mixed performance is mainly attributable to a decrease in wholesale volumes of full-size pickups and SUVs, due to planned downtime on assembly lines and a fire that affected on of the automaker’s suppliers.
Adjusted earnings before interest and taxes fell 9.8 percent to $3.5 billion, while pre-tax profit in North America fell 14 percent. This comes even before new tariffs on auto components comes into effect.
Internationally, GM made a profit of $45 million in China, compared to a loss of $106 million a year earlier. The brand is engaged in a restructuring of its Chinese operations through a 50-50 joint venture with SAIC Motor Corp.
A difficult year ahead
Back in January, GM announced an optimistic 2025 forecast, which projected net income of between $11.2 and $12.5 billion and adjusted EBIT of between $13.7 and $15.7 billion. But those forecasts assumed stable North American policies.
Since then, the auto tariffs on imported vehicles have disrupted projections. GM’s Chief Financial Officer Paul Jacobson indicated that the forecast can no longer be considered reliable, adding that the political environment is likely to continue to evolve in unpredictable ways in the coming months.
GM and the White House: ongoing dialogue
GM postponed its analyst call by two days following the White House announcement indicating a possible easing of tariffs. CEO Mary Barra stated that the carmaker was engaged in "productive discussions with the President and his administration," while expressing her gratitude towards Trump for the tariff pullback.
“The President's leadership is helping to restore fairness for companies like GM, and allows us to invest more in the American economy,” Barra said on April 28.
Revised production and adjustments in China
In response to tariff measures, GM plans to increase production of its Chevrolet Silverado and GMC Sierra light-duty pickups in Fort Wayne, Indiana. The automaker also produces vehicles in Mexico and Canada, and production schedules there may yet be adjusted depending on the evolution of trade policies.
CFO Jacobson said that GM is implementing low-cost, rapidly deployable measures to navigate the uncertain current environment.
Temporary relief, but structural risks persist
Some analysts believe the easing announced by the White House may only be a temporary respite. According to Daniel Roeska of the Bernstein firm, “The pivot on tariffs provides short-term relief, but structural risks remain. U.S. car prices are rising as economic momentum slows.”