Summary
- GM raises 2026 profit outlook on strong US truck and SUV sales
- Quarterly profit rises 13%, tops estimates despite EV challenges
- Dividend boosted 20%, approves $6 billion share buyback
- GM maintains EV strategy amid cost pressures
(Reuters) – General Motors said on Tuesday it expects to log higher profits in 2026 despite nagging tariffs, as easing U.S. environmental rules brighten the outlook for its big pickup trucks and SUVs.
The largest U.S. automaker by sales spent last year navigating fast-shifting U.S. tariffs and supply chain snags, which inflated costs and cut its core profit.
Many of those pressures remain in 2026, GM told investors, and the automaker will also grapple with rising commodity costs, including for aluminum. But GM expects profits to rebound this year largely behind a strong market for pickups and SUVs in North America, its best-selling business.
GM reported higher fourth-quarter core profit that beat analysts’ estimates, sending shares of the Detroit automaker up 7% in morning trading.
Its adjusted pre-tax earnings surged about 13% to $2.84 billion in the quarter compared with about $2.51 billion a year ago. Earnings per share of $2.51 easily surpassed analyst expectations of $2.21.
The company expects an annual adjusted core profit of $13 billion to $15 billion in 2026, a range whose midpoint exceeds analyst expectations of $13.39 billion, according to LSEG data.
“This is a very strong guide,” Evercore ISI analyst Chris McNally wrote in a research note.
The improved outlook comes despite an expected hit from higher commodity expenses and constrained supplies of computer chips. GM said those factors, along with foreign-exchange headwinds, would hurt its profits by $1 billion to $1.5 billion this year.
GM’s net fourth-quarter income was weakened by a $6 billion charge due to its electric-vehicle pullback in response to the Trump administration’s policies and fading demand, resulting in a $3.3 billion loss for the October-through-December period.
Its overall quarterly revenue fell by 5.1% to about $45.3 billion from a year ago.
NORTH AMERICAN DEMAND BOOSTS QUARTER
GM CEO Mary Barra said the company’s tariff mitigation measures helped it reduce its exposure “below our initial expectations.” In 2025, GM offset more than 40% of its gross tariff costs by shifting factory work and cutting costs elsewhere, executives said.
The company expects tariff costs of $3 billion to $4 billion this year, which it again expects to partially offset through adjustments.
GM logged strong sales of its most lucrative vehicles during the quarter: big pickups, including the Chevrolet Silverado, and hulking SUVs, such as the Cadillac Escalade.
As the industry grapples with pressures to address auto affordability concerns, GM in 2025 saw average transaction prices of nearly $52,000, with incentive spending below the industry average. GM expects North America pricing to be flat to up 0.5% in 2026.
For 2026, the outlook for GM’s big money-making vehicles has improved under a recent rollback of federal environmental regulations. The Trump administration last year froze penalties for automakers that fail to meet fuel-efficiency and tailpipe-emissions regulations.
GM said it should save as much as $750 million by not having to buy credits from EV makers such as Tesla to help comply with those rules.
The company said the easier regulatory climate will help it to bring more production back to the United States in the coming years – but that will raise expenses. GM faces up to $1.5 billion in added costs from onshoring moves, as well as shifts to its supply chain and investments in software, Chief Financial Officer Paul Jacobson told analysts on the company’s earnings call.
QUARTERLY DIVIDEND BOOSTED BY 20%
GM raised its quarterly dividend payout by 20% and approved a new $6 billion share buyback program. It repurchased roughly the same amount in 2025.
GM’s electric-vehicle business has come under pressure after the September 30 removal of a $7,500 consumer tax credit for EVs. Still, the company on Tuesday backed its EV strategy, saying it would work to reduce costs.
“From an EV perspective, we do believe that that is the end game. We’re continuing to work on cost improvements,” Barra told CNBC on Tuesday.
GM expects a cost reduction of $1 billion to $1.5 billion in its EV business because of the restructuring, Jacobson said.
In China, the automaker trimmed losses to $513 million, from more than $4 billion a year ago, as it restructured its business in the region after losing market share to Chinese rivals.
Reporting by Nathan Gomes in Bengaluru; Editing by Arun Koyyur, Bernadette Baum, Rod Nickel
