[DETROIT] General Motors has pulled its annual forecast, reflecting the uncertain effects of US President Donald Trump’s global trade war, even as it reported strong quarterly results.
The Detroit automaker’s shares fell about 2.6 per cent in premarket trading.
GM in January forecast net income between US$11.2 billion to US$12.5 billion for 2025, which did not include the impact of automotive tariffs.
Trump’s vacillating tariff policy has caused uncertainty in the automotive sector, which could be particularly hard hit, with analysts estimating new car prices could rise by thousands of dollars.
“We believe the future impact of tariffs could be significant,” GM chief financial officer Paul Jacobson said on a call with the media. “We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs.”
GM said on Tuesday (Apr 29) it was temporarily pausing its share buyback activity, pending more clarity on the economic situation.
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The automaker had in February said it would repurchase US$2 billion of shares by the first half of this year, with the rest to be bought at any point of the company’s choosing.
In the first quarter, GM reported revenue rose 2.3 per cent to US$44 billion boosted by customers rushing to buy before prices jumped, surpassing analyst expectations of US$43 billion. Adjusted earnings per share of US$2.78 also exceeded analyst forecasts of US$2.74 per share. Net income fell 6.6 per cent to US$2.8 billion.
GM also said that an analyst call to discuss these results and its updated 2025 full-year guidance, originally scheduled for Tuesday, had been moved to Thursday, May 1 following recent reports “regarding updates to trade policy”.
Trump’s 25 per cent auto tariffs imposed in early April are projected to increase costs by about US$108 billion for automakers in the US this year, according to a recent study from the Center for Automotive Research.
The Trump administration will reduce the effects of auto tariffs on Tuesday by alleviating some of the levies on foreign parts in US-made vehicles and keeping tariffs from stacking on imported vehicles.
Numerous blue-chip companies have pulled their guidance for the year in response to tariff uncertainty.
Consumer confidence has weakened dramatically since mid-February, when Trump ramped up his threats of levies on most foreign imports. Tesla last week did not give guidance, promising to revisit the issue in its next quarterly results.
In China, where GM is restructuring its business, the automaker saw some relief with equity income at US$45 million, up from a first-quarter 2024 loss of US$106 million.
GM’s positive first-quarter results come after the automaker reported a rise of about 17 per cent in US auto sales in the first quarter with high demand for trucks.
The tariffs, at least in the short term, have seemed to push some customers to make purchases with automakers such as Ford Motor and Stellantis, maker of Ram trucks and Jeeps, offering deeper discounts. New vehicle sales increased month over month and year over year in March, according to Cox Automotive.
“The industry undoubtedly benefited from some pull-ahead demand from customers purchasing vehicles ahead of potential tariffs, particularly in March,” Jacobson said on the media call. “However, this strong demand environment has continued into April, where we have seen US deliveries up more than 20 per cent versus last year.”
GM has moved to increase truck output at an Indiana plant, as first reported by Reuters. GM will discuss other measures to mitigate the effects of tariffs on a Thursday morning analyst call.
“We haven’t made any specific decisions about any major strategic changes until we get more clarity,” he said of the tariffs, adding GM is “focused on actions that we can implement quickly, efficiently and with low near-term costs.”
Barclays in mid-April cut its 2025 GM earnings before interest and taxes estimates by 40 per cent based on lower volume and the gross tariff impact of about US$9.5 billion, since the automaker makes just under half of the vehicles it sells in the US outside of the country.
GM shares have lost 12 per cent so far this year, trailing its primary rival Ford, which has gained about 3 per cent in 2025. REUTERS
