3 hours Ago By BNNBloomberg
The company said it now expects earnings before interest and taxes to fall into a range of $10 billion to $12.5 billion, down from its initial guidance in January of as much as $15.7 billion.
The reason, according to a letter to shareholders from Chief Executive Officer Mary Barra, is the company’s exposure to tariffs. GM’s lowered guidance comes even after Trump issues what he’s characterized as relief for automakers by lowering some levies on imported vehicles and parts. Even so, GM expects a hit to its profits this year unless trade deals are cut with key automotive trading partners that would reduce the automaker’s exposure.
“We look forward to maintaining our strong dialogue with the Administration on trade and other policies as they continue to evolve,” Barra said in the letter. “As you know, there are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and keep you updated as we know more.
” 25% duty Trump signed two executive orders Tuesday that reduced his initial tariffs on vehicles and parts. The first executive order gave vehicles a reprieve from separate tariffs on aluminum and steel, so levies and parts and metals wouldn’t be compounded. He also changed the 25% tariff on imported auto parts that takes effect on May 3.
Carmakers who produce and sell completed automobiles in the U.S. can claim an offset worth up to 3.
75% of the value of American-made vehicles. That offset will reduce in one year to as much as 2.5% of the value of those cars, and then be eliminated the following year.
The offset will be available for cars that were produced after April 3. Automakers still face a 25% duty on imported vehicles, which hurts GM because it makes several popular models in Canada, Mexico and South Korea. The company has a plant each in Canada and Mexico making its profitable and top-selling pickup trucks.
Its most affordable models, the Chevrolet Equinox family SUV and Chevy Trax compact SUV, are also made outside the U.S. The company has been working to reduce its exposure to tariffs to keep the entire $5 billion in exposure from cutting profits.
One move: Raising pickup truck production at a plant in Indiana to meet demand with fewer trucks that are hit with tariffs. GM said on April 29 that it beat Wall Street estimates with a profit of $2.78 a share, but profits fell due to lower truck production and foreign exchange costs.
The company also moved to preserve cash by holding off on $4 billion in planned share buybacks. During the quarter, GM cut capital spending in the quarter by $900 million to $1.8 billion.
GM shares are down more than 4% since it announced first-quarter profits. David Welch, Bloomberg News ©2025 Bloomberg L.P.
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