GM set to report Q2 results amid tariffs headwinds and EV momentum

After entering FY25 on a positive note, General Motors (NYSE: GM) is preparing to report its second-quarter results next week. The company is planning heavy investments to shift production from Mexico and Canada to the US, in the face of new import tariffs imposed by the Trump administration.

The auto giant’s stock traded slightly above its 12-month average price in the past few weeks, recovering from the recent lows. Despite significant volatility, the stock price remains unchanged from its level at the start of the year. The attractive valuation presents a compelling buying opportunity that long-term investors wouldn’t want to miss.

Q2 Report Due

General Motors is scheduled to report its Q2 FY25 results on Tuesday, July 22, at 6:30 am ET. On average, analysts following the company predict second-quarter adjusted earnings of $2.39 per share on revenues of $45.85 billion. In the year-ago quarter, it earned $3.06 per share on revenues of $47.97 billion. In the most recent quarter, both revenue and earnings increased year over year and exceeded expectations, continuing a streak of beating estimates for nearly three years.

From General Motors’ Q1 2025 earnings call:

“Over the last several years, we have been preparing for shifts in global trade policy by strengthening our US manufacturing capability and supply chains. Since 2019, we have increased our direct purchases in the US for North American production by 27% and the content in our US assembled vehicles is more than 80% USMCA compliant. In addition, we have reduced our direct material spend in China for US production to less than 3%. And we have grown to become the largest battery cell manufacturer in the US through our joint venture plants in Ohio and Tennessee.”

Q1 Outcome

In Q1 2025, GM’s revenue increased 2% from last year to $44.02 billion, exceeding estimates. Driving the growth, North America sales, which account for nearly 85% of revenues, grew 4%. Adjusted earnings rose 6% annually to $2.78 per share in the March quarter and came in above expectations. On a reported basis, net income attributable to stockholders was $2.78 billion or $3.35 per share in Q1, compared to $2.98 billion or $2.56 per share last year.

Preliminary reports show that the company’s US sales increased 7% in the second quarter and 12% in the first half of fiscal 2025, outperforming the broad auto industry. Electric vehicle sales more than doubled during the period as the company continues to expand its EV portfolio. In China, GM recorded its biggest quarterly sales growth in four years, thanks to strong performance by the new-energy vehicle lineup and high-volume nameplates.

Investment

In a significant move, the GM management recently revealed plans to invest about $4 billion over the next two years in domestic manufacturing plants to boost the production of both gas and electric vehicles. Earlier, the company announced plans to invest $888 million in the Tonawanda Propulsion plant in New York to support its next-generation V-8 engine.

GM shares traded higher on Wednesday afternoon, after opening the session slightly higher. They have gained about 7% in the past twelve months.