GM posts mixed Q3 results but upbeat full-year guidance, as tariff exposure improves

General Motors (GM) reported mixed third quarter earnings before the opening bell on Tuesday but improved its full-year profit outlook, as the biggest of the Detroit Three automakers grapples with President Trump’s auto tariffs.

GM now sees full-year EBIT in a range of $12.0 billion – $13.0 billion (prior $10 billion to $12.5 billion), with adjusted automotive free cash flow between $10.0 billion – $11.0 billion (prior $7.5 billion and $10 billion), and adjusted EPS diluted of $9.75 – $10.50 ($8.25 – $10.00).

GM said its full-year tariff exposure is now seen at around $3.5 billion to $4.5 billion, assuming tariff rates remain the same as well as indirect costs from suppliers. Last spring, the automaker lowered its full-year guidance to include a possible $4 billion to $5 billion impact from auto tariffs.

GM also said tariff mitigations were expected to offset 35% of the cost due to a lower tariff base.

For the third quarter, GM reported net revenue of $44.26 billion vs $45.18 billion estimated per Bloomberg consensus, on Q3 adjusted EPS of $2.80 vs $2.27 expected. Adjusted EBIT came in at $3.376 billion compared to $2.72 billion estimated.

GM said sales-wise its use of incentives was low, with an average of 4% of ATP (average transaction price), compared to the industry average of 6.9%.

Earlier in the month GM said Q3 sales hit 710,347, an 8% jump compared with a year ago. The automaker said it was No. 1 in overall sales in the US and snagged its best market share since 2017.

Gas-powered vehicles — including its pickup trucks like the Chevrolet Silverado and full-size SUVs like the GMC Yukon — drove the gains. Both categories are poised to lead the industry by the end of the year, GM said.

Not surprisingly, GM’s EV sales surged in Q3 ahead of the expiration of the $7,500 federal EV tax credit to record of 66,501 units sold in the quarter

But the EV business is expected to throttle down a bit after expiration of the tax credit.

The automaker said last week it will take a $1.6 billion charge from a reassessment of its EV plans, with $1.2 billion of the impact being non-cash special charges as a result of adjustments to its EV capacity. The other $400 million in cash is primarily related to contract cancellation fees and commercial settlements associated with EV-related investments, GM said.

The other big issue looming for GM is tariff cost exposure.