General Motors Earnings Preview: EV Headwinds and Shifting Markets

General Motors Company (GM) is set to release its next earnings report today, a pivotal moment for the automaker after a volatile October for the stock. Heading into the print, GM's stock trades at $57.90 in the pre-market, a slight dip of $0.10, to follow a 0.65% pullback during Monday's regular session. 

The stock had pulled back 10% from highs during the first weeks of October following an announced charge, only to find some support around $55, to move 4.7% up from there. Markets could well be awaiting earnings with some baited breath.

Analysts are projecting earnings per share (EPS) of $2.32 for the current quarter, a significant 21.62% decrease on the $2.96 from the same quarter last year. Revenue is expected to have declined by 7.03% to $45.33billion. 

However, these figures must be viewed within the context of recent headwinds facing GM, particularly in its electric vehicle (EV) strategy.

The most significant development is the $1.6 billion charge GM announced earlier this month. This stems from the U.S. government's decision to terminate the $7,500 federal tax credit for certain EVs, coupled with relaxed emissions regulations. The charge includes a $1.2 billion non-cash impairment related to EV capacity adjustments and $400 million for contract cancellations and settlements, a clear indication that GM is reassessing its EV production plans.

Adding to the complexity, GM recently backtracked on a program designed to allow dealers to continue offering the $7,500 tax credit on EV leases after the federal subsidy expired. This decision, following concerns raised by Senator Bernie Moreno, highlights the political and regulatory challenges inherent in the transition to electric vehicles.

These recent setbacks follow a mixed financial performance throughout the year. While GM beat earnings expectations in both Q1 and Q4 of 2024, and Q1 of 2025, the second quarter of 2025 saw a 35% decline in net income, attributed to tariffs and other factors. Tariffs have cost GM $1.1 billion in 2025, leading to a 32% decrease in global EBIT.

While the prevailing narrative focuses on the challenges facing GM's EV strategy, the company's strategic shift could ultimately prove beneficial. By scaling back its aggressive EV production targets, GM may be able to allocate resources more efficiently, focusing on higher-margin vehicles and technologies.

The slower EV adoption rate could also allow GM to refine its battery technology and charging infrastructure strategies, potentially giving it a competitive edge in the long run. Furthermore, the continued strength of the traditional internal combustion engine (ICE) vehicle market provides a stable revenue stream, allowing GM to weather the EV transition more effectively than pure-play EV manufacturers.

This view suggests that GM's current challenges are not necessarily signs of weakness, but rather a pragmatic adjustment to a dynamic market environment.

Looking back at 2024, GM consistently raised its full-year earnings guidance throughout the year, demonstrating its ability to adapt to changing market conditions. However, the current climate presents a unique set of challenges, and the upcoming earnings report will be crucial in determining whether GM can navigate these headwinds and maintain its financial stability. Markets will be closely watching for updates on GM's EV strategy, cost-cutting measures, and overall outlook for the remainder of 2025 and beyond.

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