GM Stock Soars Despite Tariff Headwinds and EV Transformation Challenges

General Motors navigates regulatory storms while accelerating electric vehicle ambitions—and investors are cheering the progress.

Tariff Tango and EV Evolution

The automotive giant faces mounting pressure from international trade barriers while simultaneously reinventing its core business around electric propulsion. Market sentiment appears bullish despite these dual challenges, suggesting confidence in GM's strategic positioning.

Wall Street's vote of confidence comes as legacy automakers race to catch pure-play EV competitors—because nothing says 'innovation' like playing catch-up while regulators keep moving the goalposts.

Key Takeaways

• General Motors stock took off Tuesday morning as the car manufacturer adjusted to tariffs more quickly than anticipated, Citi analysts said.
• Investors didn't seem put off by a $1.6 billion charge tied to GM reevaluating its electric vehicle strategy in response to regulation changes.
  

General Motors shares are racing higher. Progress dealing with tariffs is helping.

The Detroit-based auto manufacturer says it's investing $5 billion in scaling up domestic production of engines and 2 million vehicles per year—a MOVE that seems safer thanks to the extension of a policy that offers some relief to U.S. companies with operations in Mexico and Canada. General Motors (GM) scaled back the anticipated cost of tariffs to $3.5 billion to $4.5 billion a year, CFO Paul Jacobson said on a conference call. The company is also moving quicker than expected and may offset the hit by the end of 2026, Citi analysts said.

The U.S.'s offset program, which targets medium-and heavy-duty vehicles, "will help make U.S.-produced vehicles more competitive over the next five years, and GM is very well positioned as we invest to increase our already significant domestic sourcing and manufacturing footprint," CEO Mary Barra said in a letter to investors.

What This News Means for Investors

Investors may be more optimistic about domestic car manufacturers now that GM and Stellantis have shown resilience in the face of changing environmental policies and an evolving trade backdrop. They're slated to get more insight when Ford and Tesla report later this week.

GM's revenue fell 0.3% year-over-year to $48.6 billion in its third quarter. Analysts were expecting a more significant decline, to $45 billion, according to Visible Alpha. The company reported $2.80 in adjusted earnings per share, which beat the $2.25 consensus estimate from Visible Alpha.

The update sent shares rising some 14% Tuesday, putting the stock up about 9% so far this year and at fresh 2025 highs. Similarly, Stellantis (STLA) shares jumped earlier this month when the domestic car manufacturer reported sales growth after several quarters of declines. Stellantis was up more than 4% today, as was Ford (F), which along with Tesla (TSLA) reports later this week.

The company is taking a $1.6 billion loss on its approach to electric vehicles. Electric vehicle sales in the U.S. surged as Americans rushed to buy them before the expiration of a $7,500 federal tax credit, the company said. The loss of that incentive—along with the federal government backing away from stricter emissions standards—has the company "reassessing" its plans, the CEO said.

"It is now clear that near-term EV adoption will be lower than planned," Barra said in a letter to investors. "The work, which is ongoing, resulted in a special charge in the third quarter, and we expect future charges. By acting swiftly and decisively to address overcapacity, we expect to reduce EV losses in 2026 and beyond."