DETROIT – General Motors announced on Thursday a revision of its earnings forecast for 2025, projecting a potential impact between $4 billion and $5 billion due to the auto tariffs imposed by President Donald Trump.
The automaker’s updated guidance indicates adjusted earnings before interest and taxes will range from $10 billion to $12.5 billion, a notable decline from its previous forecast of $13.7 billion to $15.7 billion, which did not reflect the tariffs’ influence.
In the revised 2025 guidance, GM anticipates net income attributable to stockholders will be between $8.2 billion and $10.1 billion, down from an earlier estimate of $11.2 billion to $12.5 billion. Adjusted automotive free cash flow is now expected to be between $7.5 billion and $10 billion, down from prior expectations of $11 billion to $13 billion. However, the company has retained its capital spending target of $10 billion to $11 billion.
“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,” stated GM CEO Mary Barra in a letter to shareholders on Thursday.
Read more
This guidance adjustment incorporates the “positive impact” resulting from recent tariff changes introduced by the Trump administration, which include reimbursements for automakers procuring U.S. parts and the reduction of cumulative tariffs that affect the sector.
Earlier this week, GM reported first-quarter results that exceeded Wall Street’s forecasts but subsequently postponed its investor call and the release of updated guidance due to the anticipated changes in auto tariffs.
In an interview with Finance Newso’s Phil LeBeau, Barra emphasized that the company is taking steps to mitigate the increased costs resulting from the tariffs.
“Absolutely, we can make changes. We’ve been working on our supply chain since 2019 to be more resilient,” Barra explained, noting a 27% increase in parts sourced from U.S. suppliers. “We have a lot of opportunities to collaborate with our supply base to boost the U.S. content, and you will see more announcements from us now that we have this clarity to reinvest in the U.S.”
When asked if production would shift from Mexican facilities to the U.S., Barra refrained from providing specifics but asserted that GM would effectively utilize its existing assets, including 11 major assembly plants in the U.S. that employ thousands of workers.
“We’re going to leverage that footprint we have because we can add capacity to many of those plants. This approach is efficient and allows us to act more swiftly than starting from scratch,” Barra stated.
