GM Faces Earnings Pressure as EV Strategy Shift Weighs on Quarterly Results

Wall Street’s Earnings Expectations

General Motors is preparing to release its third-quarter financial results amid analyst projections showing substantial year-over-year declines, according to average estimates compiled by LSEG. Sources indicate the Detroit automaker could report a 7.2% decrease in revenue alongside a 22% drop in adjusted earnings per share compared to the same period last year.

Wall Street’s Earnings Expectations
EV Strategy Shift Creates Financial Headwinds
Broader Industry Challenges Persist
Tariff Impacts and Financial Guidance
Market Performance Context

These anticipated results would represent a notable departure from GM’s performance in the third quarter of 2024, when the company reportedly generated $48.76 billion in revenue, $3 billion in net income attributable to stockholders, and $4.1 billion in adjusted earnings before interest and taxes.

EV Strategy Shift Creates Financial Headwinds

The earnings report comes just one week after GM pre-reported a significant $1.6 billion special-item impact resulting from its strategic pullback in all-electric vehicle investments, according to company statements. Analysts suggest this cost, comprising a $1.2 billion noncash impact and $400 million in cash expenditures, will not affect adjusted results but will nevertheless pressure the automaker’s overall financial performance.

This substantial investment shift reflects the evolving landscape for electric vehicles, where automakers are reportedly adjusting production timelines and capital allocation in response to changing market conditions and consumer demand patterns.

Broader Industry Challenges Persist

Beyond specific EV strategy adjustments, industry reports indicate GM and the broader automotive sector continue navigating multiple headwinds. These challenges reportedly include evolving regulatory requirements, increasing tariff pressures, persistent inflation, and various supply chain disruptions that have characterized the post-pandemic automotive environment.

Several Wall Street analysts have expressed concerns that GM could miss quarterly estimates, with additional “downside risk” identified due to shifts in truck production schedules, changing vehicle trim mix preferences, and other operational factors such as warranty costs.

Tariff Impacts and Financial Guidance

According to previous statements from GM Chief Financial Officer Paul Jacobson, tariff impacts were expected to be “slightly higher” during the third quarter compared to the preceding period. The company reportedly anticipates between $4 billion and $5 billion in increased tariff costs throughout 2025, with expectations to offset at least 30% of these additional expenses.

GM’s full-year guidance, modified in May specifically due to tariff considerations, includes adjusted EBIT of $10 billion to $12.5 billion, adjusted earnings per share of $8.25 to $10, net income attributable to stockholders of $7.7 billion to $9.5 billion, and adjusted automotive free cash flow between $7.5 billion and $10 billion, according to the company‘s official projections.

Market Performance Context

Despite the anticipated quarterly challenges, GM shares have demonstrated resilience in 2025, with sources indicating the stock has gained approximately 9% year-to-date through Monday’s market close. This performance suggests investors may be looking beyond near-term headwinds toward the company’s longer-term strategic positioning.

The automotive industry continues to navigate a complex transformation period, balancing traditional combustion engine portfolios with emerging electric and autonomous technologies while managing macroeconomic pressures and changing consumer preferences across global markets.