General Motors has revised its financial guidance for 2025, adjusting for a projected $4 billion to $5 billion negative impact from recently implemented auto tariffs. The company now anticipates adjusted earnings before interest and taxes to range between $10 billion and $12.5 billion, down from the previous estimate of $13.7 billion to $15.7 billion. Net income attributable to shareholders is forecasted between $8.2 billion and $10.1 billion, a decrease from the prior range of $11.2 billion to $12.5 billion. Additionally, GM now expects its adjusted automotive free cash flow to fall between $7.5 billion and $10 billion, compared to its earlier estimate of $11 billion to $13 billion.
Despite these downward revisions, GM has reaffirmed its capital spending plans of $10 billion to $11 billion, which includes investments in its battery joint ventures. The company also announced an expected $500 million expenditure in the second quarter to address a recall involving nearly 600,000 SUVs and trucks due to engine-related issues.
GM CEO Mary Barra emphasized that the company remains strong and is positioned to adapt effectively to the evolving trade policy environment. She noted that the updated forecast reflects not only the expected impact of tariffs but also the recent modifications by the administration, which include reimbursement for some U.S.-sourced parts and reduced compounding of tariffs across the supply chain.
Chief Financial Officer Paul Jacobson stated that GM is actively working to offset the increased costs, aiming to mitigate at least 30% of the tariff impact through internal cost-saving initiatives. These self-help measures are already factored into the revised guidance, although the full $4 billion to $5 billion tariff-related cost increase is not.
The company highlighted its strategic focus on enhancing supply chain resilience, citing a 27% increase in U.S.-sourced components since 2019. Barra confirmed that GM will capitalize on its existing U.S. manufacturing infrastructure, including 11 major assembly plants, to adjust capacity as needed rather than building new facilities.
While Barra refrained from confirming any potential production shifts from Mexico to the U.S., she emphasized the efficiency of expanding within GM’s current footprint. Pricing strategies remain uncertain, though the company expects stable vehicle prices and slightly improved market conditions compared to last year, despite an anticipated decline in industry-wide sales.
READ MORE: