Despite supply shortages, a slowing electric vehicle market, and tariffs, General Motors reported surprisingly strong results on Tuesday, which helped the stock have its best day in five years.
The automaker announced that it is cutting its unprofitable electric vehicle division quickly and lowering a multibillion-dollar tariff bill more quickly than anticipated. GM revealed a $1.6 billion write-off related to underutilized EV factories last week. GM will take another special charge in the fourth quarter as it stops producing electric vans for commercial customers, Chief Executive Mary Barra said Tuesday.
General Motors shares increase by a whopping 15%
“Given the changing landscape, GM has found a way to turn it much faster than in the past,” Citi analyst Michael Ward said, comparing the Detroit automaker to a “big ship” that is hard to steer. At a record high, shares rose 15%, GM’s largest one-day gain since 2020.
Wall Street grew increasingly confident that GM could profit from high-demand gasoline-powered trucks and sport-utility vehicles while containing tariff and EV losses. Barra stated that GM intends to increase production at a Michigan plant once scheduled for EV assembly because the company is unable to meet demand for gas-burning full-size SUVs. Potential benefits from a trade agreement with South Korea that might lower tariffs on Chevrolets and Buicks, as well as from a renegotiated North American trade agreement that might lower tariffs on automobiles manufactured in Canada and Mexico, are not included in GM’s 2026 projections.
Barra thanked President Trump in her letter to shareholders for extending tariff relief on auto parts from Canada and Mexico, which will save GM roughly $500 million in 2025 and more in the years that follow.
GM continues to project that tariffs will hurt its bottom line by at least $2.3 billion in 2025. The company wants to lessen that impact next year, according to Chief Financial Officer Paul Jacobson, but the tariff rates on imports from South Korea and Mexico are still up in the air.
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