The news: GM raised its full-year profit forecast for the second time this year. It now expects $14 billion to $16 billion in EBIT-adjusted earnings, a measure of operating profit, and $9.5 billion to $11.5 billion in adjusted automotive free cash flow.
Second-quarter revenue was $48 billion. Adjusted earnings were $3.57 a share, above the $3.20 analysts expected and up from $2.53 a year ago.
GM still expects tariff costs of $2.5 billion to $3.5 billion this year, a number CFO Paul Jacobson called “largely flat year over year.”
That range is an EBIT-adjusted impact, while the quarterly figures GM gives are gross and run higher. Tariffs cost about $900 million in the second quarter, and GM expects the third and fourth quarters to be similar.
First-half costs were about $1.3 billion, net of a $500 million benefit booked in the first quarter under IEEPA. IEEPA is the emergency-powers law behind tariffs the Supreme Court struck down in February. GM has not broken out how much of the flat line is mitigation and how much is stable volumes and mix.
Net income still fell 31% to $1.3 billion, because GM took $2.3 billion of EV-related charges in the quarter.
Asked whether onshoring would be enough to meet a proposed 50% US-content requirement, CEO Mary Barra pointed to work that predates the tariffs. “That’s something we started after the semiconductor shortage and Covid-19 pandemic, recognizing that the global supply chain needed to be much more resilient,” she said on the call. She did not attach a tariff number to it.
What changed: The resilience program has four parts.
On assembly, GM is spending $1 billion to $1.5 billion this year to onshore production, strengthen its supply chain and expand software. That spend is part of a $4 billion plant program that Barra said takes US assembly capacity above 2 million units.
Orion Assembly in Michigan starts building gas full-size SUVs and light-duty pickups in early 2027.
Fairfax Assembly in Kansas City takes the gas Chevrolet Equinox from Mexico in mid-2027, and Spring Hill in Tennessee takes the gas Blazer the same year.
Engine work follows: $888 million at Tonawanda, New York, for the next-generation V8, and $830 million across propulsion and casting plants in Michigan and Ohio.
GM booked about $400 million of the spend in the first half, before any of the new volume arrives. Jacobson said the fourth quarter carries the largest impact as GM prepares to move Escalade production to Orion. “The biggest drag is probably as we hire them before we get production in place,” he said.
Building a vehicle on a US line stops the finished-vehicle duty, because imported vehicles pay tariffs under Section 232, the national-security trade law. And the Supreme Court’s February ruling on IEEPA left those tariffs in place.
The parts inside that vehicle are a separate question, because the parts tariff does not apply to components that qualify under USMCA, the US-Mexico-Canada trade agreement. US assemblers also get an import-adjustment offset worth 3.75% of total vehicle value, so parts coming north from Mexico would largely not be dutiable.
On chips, Barra said GM’s relationships with Micron and Samsung are “strategic engagements and long-term engagements that go back to 2022.” GM deals directly with the chipmakers rather than leaving semiconductors to its parts suppliers.
Memory costs sit inside GM’s commodity guidance this year, which runs $1.5 billion to $2 billion including logistics and higher prices for DRAM, a type of memory chip.
On batteries, GM has taken $10.9 billion in EV-related charges since the second half of 2025, shrinking its EV supply chain to match demand that did not arrive.
Of the $2.3 billion booked this quarter, $900 million was supplier settlements and $700 million went to resizing battery joint ventures with its partners. The last $700 million was non-cash write-offs. Jacobson said the actions “substantially complete the material cash charges” GM expects, while allowing for later true-ups.
The surviving plants are being converted rather than closed. Lines making LFP cells, a lower-cost battery chemistry, are coming to Spring Hill, and LMR cells, another chemistry, are in development with LG Energy Solution.
GM’s sodium-ion partnership with the startup Peak Energy is aimed at grid storage rather than vehicles and has no plant attached. GM “turned down opportunities to put billions of dollars of capital into plants to tool up for what is already a highly competitive business based on potential extension of government credits and tax credits,” Jacobson said.
In Mexico, GM is staying: all four of its plants there remain open, with Ramos Arizpe running as a dedicated EV site.
GM is adding about $1 billion to its Mexican operations, aimed at the domestic and regional market rather than US export. US-bound gas volume moves north, while the rest of the network stays put.
What’s unclear: We found no announcement, as of publication, of new US supplier capacity tied to Fairfax, Spring Hill or Orion.
Suppliers often do not name the vehicle program behind a plant investment, so no announcement does not mean no capacity is coming. The three plants also have existing supplier bases. But moving assembly north only cuts the tariff bill to the extent the parts move too.
Canada is the other open question. The Section 338 duties on Canada, a separate set of tariffs that took effect August 22 after a three-day extension, exclude anything already subject to Section 232. And vehicles are not on the covered list.
So Canadian-built cars keep paying the existing auto duty rather than a new 50%.
Barra said on the call that GM is “hoping we can get through some of the back and forth that’s happening between the U.S. and Canada.” She did not put a number on what it would cost.
The counter: The case for absorbing the duty instead rests on how often tariff policy has changed. The IEEPA tariffs were struck down in February, and a 10% surcharge under Section 122 ran its 150 days and lapsed in July.
Section 232 survives for now, but GM is committing $4 billion to capacity that pays off only if the duty is still there in 2030. A network run for total landed cost, with the duty absorbed, carries no stranded plants if the policy turns again.
Toyota has run closer to that model, at least so far. It guided in August last year to a 1.4 trillion yen tariff hit, about $9.5 billion at the time, for the fiscal year that ended in March.
That figure was a forecast rather than a result. Toyota is also a larger company with heavier Japan-import exposure than GM’s, so the two numbers are not measured the same way.
Bloomberg Intelligence said then that Toyota appeared to be working on mitigation, including revising its supply chain for US-bound vehicles. Toyota has since committed $3.6 billion to a second San Antonio line to move Tacoma production from Tijuana over four years.
My view: The part of GM's story that holds up is the timing problem, and GM’s own numbers show it. None of the three plants taking US-bound volume opens before 2027.
This year, the onshoring work is a cost: roughly $400 million booked in the first half, with the heaviest quarter still ahead. Whatever is holding the tariff line flat in 2026, it is not the plants, because they are not running yet.
The $10.9 billion of EV charges is worth separating from all of it. That is the cost of a demand forecast being wrong, not the price of supply-chain flexibility, and folding it into a resilience story flatters the strategy.
I would watch the components. USMCA-qualifying parts are not dutiable, so the tariff case for moving the parts base is weak.
The case that remains is the one GM has said least about. It is whether the suppliers feeding Fairfax, Spring Hill and Orion can actually serve those lines on the timeline the plants are being built to.
