Auto Tariff Changes Are Coming, Uncertainty Derails GM Earnings Call

The uncertainty over the Trump Administration’s trade policy forced General Motors to hold off on its first-quarter earnings call with investors. GM issued its financial results but was reluctant to offer full-year guidance with so much uncertainty.

Reports suggest there will be an update on tariffs affecting the auto industry and GM CEO Mary Barra has been part of the industry lobbying efforts with the Administration. “We’re grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us,” Barra said in a statement describing the “productive conversations” with the President. “We believe the president’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy.” A coalition of auto industry groups last week urged President Trump to not impose 25 percent tariffs on parts coming from outside the U.S., a move the president planned to implement on May 3. The coalition warned it would mean higher prices for new vehicle purchases as well as higher costs for repairs and service.

The White House appears poised to change the proposed tariffs on car parts and the stacking of multiple tariffs, removing the addition of additional taxes on steel and aluminum, according to the Wall Street Journal. Trump is in Michigan today where he might make these changes official.

GM has rescheduled its conference call for Thursday morning to discuss its results and provide an updated guidance for the year. The automaker said its previous guidance issued in January was no longer reliable given the ever-changing potential impact of tariffs.

GM First-Quarter Earnings

The numbers themselves were better than expected. GM ended the quarter with increased revenue at $44 billion, up 2.3 percent but net income dopped 6.6 percent to $2.8 billion. Adjusted earnings were down almost 10 percent to $3.5 billion which included a 14 percent drop in pretax profits from North America, the region that is relied on to generate the bulk of the profits. As a result, the profit margin remains in the single digits and down from a year ago.

Excess Capacity for Electric Trucks

GM also appears to be rethinking its decision to retool its Orion Assembly Plant as a dedicated facility making electric vehicles, starting with the Chevrolet Silverado EV and GMC Sierra EV fullsize pickups in late 2026. The automaker is spending $4 billion to retool and expand the Michigan plant, augmenting electric truck production at Factory Zero in Detroit-Hamtramck. Together they could build 600,000 electric trucks a year.

But the trucks are not selling well—GM is not using all its capacity at Factory Zero. As a result, the product plans for the Orion plant are being re-evaluated, according to Crain’s Detroit Business. GM’s response is that the timing remains consistent. That leaves the door open for a change of heart as to what the plant makes, given that EV adoption remains slower than anticipated while there is growing demand for hybrids and plug-in hybrids. Crain’s reports that no decision has been made yet. GM has acknowledged it needs more hybrids and needs to offer plug-in hybrids in North America. We expect them by 2027.

The Orion plant, near Detroit, has been closed since 2023. It made the Chevrolet Bolt. A next-generation Bolt EV, on a new platform, is under development and will be assembled at the Fairfax plant in Kansas. It is due this year.

Meanwhile, GM has said it will build more Silverados and Sierras with internal combustion engines at its Fort Wayne, Indiana, plant, relying less on the trucks it builds in both Canada and Mexico.