General Motors (GM) on Tuesday reported first-quarter earnings that exceeded Wall Street expectations, but the automaker simultaneously withdrew its 2025 forward guidance, citing unresolved questions surrounding President Donald Trump’s auto tariff policy and its impact on industry operations.
While GM posted $44.02 billion in Q1 revenue, topping Bloomberg’s consensus estimate of $43.03 billion, and an adjusted EPS of $2.78, ahead of the $2.72 forecast, the company stopped short of offering any forward projections. CFO Paul Jacobson told reporters that investors could no longer “rely” on previously issued guidance due to the potential material effects of tariffs.
GM’s decision reflects a broader atmosphere of uncertainty in the auto industry, as executives await final confirmation from the White House on a policy shift that could bring retroactive tariff relief.
White House Signals Tariff Relief for Automakers
Late Monday, The Wall Street Journal reported that the Trump administration will modify its tariff regime to prevent compounded duties on foreign-made cars and parts, easing the burden on U.S. automakers. The decision, confirmed by Commerce Secretary Howard Lutnick, would apply retroactively and allow companies like GM to claim reimbursement for previously paid duties on steel, aluminum, and imported vehicle components.
Under the proposed framework, new auto parts tariffs set to take effect May 3 would be reimbursed up to 3.75% of a U.S.-made vehicle’s value for one year, then reduced to 2.5% in year two before full phase-out. An official announcement is expected Tuesday night at a Trump rally in Michigan, a politically pivotal state for the president and an automotive stronghold.
“We appreciate the productive conversations with the President and his Administration,” said Mary Barra, GM’s Chair and CEO, in a statement. “We look forward to continuing to work together.”
Operational Results: Strength Meets Margin Pressure
Despite the solid revenue and EPS numbers, GM faced pressure on margins, reporting adjusted EBIT of $3.49 billion, down 9.8% year-over-year. Operating income was $3.35 billion, slightly below the $3.45 billion forecast, as higher input costs, foreign exchange headwinds, and an evolving product mix weighed on performance. The EBIT-adjusted margin fell to 7.9%, down from 9.0% in the prior-year period.
Jacobson attributed the margin erosion to persistent inflationary pressures and tariff exposure, noting that GM would not offer comment on potential pricing adjustments at this stage.
Capital Strategy: Share Buybacks Paused, ASR to Finish
The company also said it would pause any new share repurchase activity but confirmed it will complete its current $2 billion accelerated share repurchase (ASR) program in the second quarter. GM reiterated that it does not foresee a need for additional capital, a point of reassurance amid market volatility.
The announcement adds to a complex outlook for GM investors, many of whom had been eyeing the company’s strategic transformation — including its shift toward EVs and autonomous technology — as a long-term growth catalyst.
Investor Outlook: Positive Signals, Clouded by Policy Risk
Shares of GM fell more than 2% in pre-market trading Tuesday before stabilizing after the earnings release. Analysts noted the tariff policy shift could significantly reduce near-term cost burdens, but the lack of forward guidance may leave investors in a holding pattern until more details emerge.
“GM is executing well operationally, but the political overlay makes it difficult to model future quarters,” said Rebecca Lindholm, autos analyst at Barron West Partners. “If the White House follows through with the retroactive relief, it could meaningfully improve GM’s full-year outlook — but we’re still in wait-and-see mode.”
With tariff clarity expected soon, GM has postponed its earnings call to Thursday, likely to provide more informed commentary once the administration formalizes the trade relief package.
