GM Profit Falls Amid Tariff Costs Despite EV Gains
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General Motors Tonawanda Propulsion plant employee Shantelle Colston at work Wednesday, May 28, 2025, as GM announces plans to invest $888 million in the facility to support the production of the sixth generation of GM’s V-8 engines. Photo by KC Kratt for General Motors
As reported by the NY Times, General Motors reported a 34% drop in second-quarter profit due to more than $1 billion in costs from tariffs imposed under President Trump’s trade policies. The company earned $1.9 billion for the quarter, down from $2.9 billion the previous year, while revenue slipped 2% to $47 billion.
The company expects total tariff-related costs to reach $5 billion in 2025 but hopes to offset some of that by cutting costs and reshoring production. CEO Mary Barra announced a $4 billion investment to boost U.S. production of pickups and SUVs that are less affected by tariffs.
Despite a challenging quarter, electric vehicle (EV) sales more than doubled, helped by new models like the electric Chevy Equinox. GM now holds 16% of the U.S. EV market, second to Tesla. However, the company is also investing $900 million in a new V-8 engine plant in New York, taking advantage of relaxed emissions regulations, and signaling a longer lifespan for gas-powered vehicles.
GM did see a bright spot in China, where sales rose to $6.1 billion—up from $4.7 billion a year earlier—despite growing competition from local EV makers like BYD. The company’s joint venture with SAIC Motor resulted in half of its vehicle sales coming from electric or hybrid models.
Shares of GM fell roughly 7% following the earnings report.
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