Tariff exposure, EV business on investor agenda

General Motors (GM) will report third quarter earnings before the opening bell on Tuesday morning as the biggest of the Detroit Three automakers grapples with President Trump’s auto tariffs and an EV business in flux.

GM is expected to report Q1 revenue of $45.16 billion per Bloomberg consensus, down 7% compared to a year ago. Analysts expect GM to post Q1 adjusted EPS of $2.27, with adjusted net income coming in at $2.25 billion.

GM’s drop in revenue isn’t the result of a lack of sales. GM said Q3 sales hit 710,347, an 8% jump compared to 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.

Read more: The latest news and updates on Trump’s tariffs

Last spring, the automaker lowered its full-year guidance to include a possible $4 billion to $5 billion impact from auto tariffs, though in summer, after reporting Q2 earnings, GM affirmed its guidance and said its projected tariff impact would remain unchanged.

GM currently sees full-year EBIT in a range of $10 billion to $12.5 billion, with net income attributable to stockholders of $8.25 to $10 billion, and adjusted automotive free cash flow between $7.5 billion and $10 billion.

In an effort to combat the effect of tariffs and boost US production, GM committed $4 billion to expand its US manufacturing capabilities.

GM’s hits to its guidance and increased spending are taking a toll on other US manufacturers, including Ford (F), Tesla (TSLA), and even foreign automakers such as Toyota (TM) that build in USMCA countries like the US, Canada, and Mexico.

Anderson Economic Group reported that tariffs on cars and parts from Canada and Mexico alone costed automakers over $6 billion this summer and will top $10 billion in aggregate by the end of this month.