America’s biggest carmaker just posted a steep drop in profits and doubled down on a controversial truth: electric vehicles are still the future.
General Motors, known for brands like Chevrolet, Cadillac, GMC, and Buick, announced a net income of $1.89 billion for the second quarter, marking a sharp decline of $1.1 billion compared to the $2.93 billion earned in the same timeframe last year.
That’s a 35 percent drop from the previous quarter alone.
The company’s falling profits come amid major regulatory upheaval and tariff pressure.
Earlier in the month, Republicans enacted the Big, Beautiful Bill Act, which reduced consumer subsidies for electric and plug-in vehicles and altered corporate fuel economy targets, presenting a challenge to automakers investing in battery-powered models.
But despite the political pushback, GM CEO Mary Barra made clear in a letter to shareholders: the company isn’t backing off its EV strategy.
‘We are also growing in EVs because people love the design, performance, range, and value,’ she wrote in a shareholder letter Tuesday.
‘Despite slower growth in the EV sector, we maintain that the future of profitable vehicle production lies in electric vehicles, which remains our guiding principle.’
GM doubled down on its future EV fleet, praising the company’s current sales trajectory
Wall Street reacted swiftly to the earnings miss, sending GM’s stock down nearly 7 percent. But some analysts said the selloff was overblown.
‘The sell off this morning is unfair,’ David Whiston, a car industry analyst at Morningstar, told DailyMail.com. ‘Tariffs took a lot out of earnings but that should have been expected by the market.’
In May, GM lowered its full-year profit forecast and said it expects to spend between $4 billion and $5 billion complying with the trade policies.
The company is currently pouring billions into US manufacturing as it looks to avoid steep new import tariffs tied to President Donald Trump’s 25 percent levy.
The automaker is investing nearly $900 million to overhaul a powertrain plant near Buffalo, New York, where it will build gas-powered V8 engines for its high-margin trucks and SUVs.
It also paused production at one of its Mexican truck plants last week before announcing a boost in production from an assembly plant in Michigan.
Barra said the company will benefit from the ‘longer runway’ provided to gas-combustion vehicles in the Republican bill.
The company’s best-selling cars, the Chevy Silverado and GMC Sierra, produce the most profits for the automaker.
GM said reported a $1.1 billion drop in revenue compared to the same quarter last year – Wall Street was not happy with the results
In a letter to shareholders, GM’s Mary Barra said the company’s ‘north star’ remains EV profitability
But Barra said GM’s market share in the EV industry is gaining. She doesn’t expect that will stop.
‘Five years ago, the EV market essentially had one player,’ she wrote.
‘Today, there are 30, and Chevrolet became the number two EV brand in the second quarter, while Cadillac became the number five EV brand overall and the luxury EV leader.’
GM, which currently has a slate of electric SUVs, trucks, and a sedan with price tags between $35,000 and $340,000 is expecting to roll out even more EVs.
In February, the company killed off the Cadillac XT4’s Kansas-based production to make way for the upcoming Chevy Bolt EV.
The upcoming Bolt is expected to compete as one of the cheapest EVs in the US market.
‘The EV plan seems to be continuing to have more product choices which can in turn increase EV sales mix, while also reducing battery costs,’ Whiston said.
‘It’s a long journey that’s not close to over.’
A representative for GM didn’t immediately respond to DailyMail.com’s request for comment.
