GM Cuts 2025 Profit Outlook by $4B-$5B Due to US Tariffs
Published • 1 May 2025 at 3:03 PM
Revised Outlook: GM Expects Lower 2025 Profit on Tariff Costs
General Motors (GM) has cut its 2025 profit forecast due to a projected $4–$5 billion impact from U.S. automotive tariffs, especially on vehicles imported from South Korea. The company now expects adjusted core profit between $10 billion and $12.5 billion, down from its earlier guidance of $13.7 billion to $15.7 billion. CEO Mary Barra said GM is working closely with the Trump administration on evolving trade policies and is actively deploying cost-mitigation strategies, including increasing U.S. content in vehicles and expanding domestic battery module production. CFO Paul Jacobson noted GM aims to offset at least 30% of the tariff burden. The automaker is also scrutinizing discretionary spending and boosting U.S. manufacturing, including plans to increase truck production at its Fort Wayne, Indiana plant. GM’s expected net income is now between $8.2 billion and $10.1 billion, with capital spending set at $10–$11 billion. The revised forecast comes after the White House offered some relief on auto tariffs, allowing companies to offset costs for imported parts used in U.S.-assembled vehicles.
GM's Profit Forecast Reduced $4B-$5B Amid Tariff Concerns
- Profit Forecast Cut: GM lowered its 2025 adjusted core profit forecast to $10–$12.5 billion, down from $13.7–$15.7 billion.
- Tariff Impact: The cut is due to an expected $4–$5 billion hit from new U.S. automotive tariffs, mainly affecting imports from South Korea.
- Net Income Outlook: GM now expects net income of $8.2–$10.1 billion for 2025.
- Cost-Mitigation Efforts: GM is increasing U.S. content in vehicles and expanding domestic battery module production to offset tariff costs.
- Offset Target: CFO Paul Jacobson said the company aims to offset at least 30% of the tariff burden.
- Production Shift: GM plans to boost truck production at its Fort Wayne, Indiana plant.
- Discretionary Spending Review: The company is tightening control over discretionary expenses to manage costs.
- Capital Spending: Capital expenditures are projected at $10–$11 billion for the year.
- White House Relief: The Biden administration provided partial relief, allowing cost offsets for imported parts used in U.S. assembly.
- Policy Engagement: CEO Mary Barra confirmed that GM is working closely with the Trump administration on evolving trade policies.
