GM's pickup line

EVs, robotaxis, and billions in write-downs: If everything had gone as GM planned, the automaker’s future would look pretty slick. Instead, its current profitable phase looks more like a rusty, trusty Silverado.

The company made $50 billion in revenue last quarter, up 2.9% from a year ago and slightly ahead of expectations, as its pricey pickups and SUVs did some heavy lifting. GM also unveiled a new $20 billion share buyback, adding to the $29.5 billion it has already spent repurchasing stock since 2023.

But investors weren’t revving their engines. GM narrowed its full-year profit forecast rather than raising it, and shares fell as the company warned that cost pressures like commodities and logistics are worsening.

That’s a pretty clear signal about what management thinks creates the most value right now: Protect margins, spend more carefully on growth, and give excess cash back to investors.

Less EV, more V8

GM sold a higher mix of large pickups and fewer EVs last quarter, padding margins as the company backed away from electric vehicles that have historically lost money. GM is now preparing redesigned Chevrolet Silverado and GMC Sierra pickups, including more versions with premium V8 engines.

So far, that pullback looks well-timed. EVs have fallen to about 6% of the US auto market, while hybrid sales are up 23% this year and now account for 15.6% of total auto sales. GM largely skipped that middle ground during its all-electric push, though CEO Mary Barra said Tuesday the company “will have hybrids” across multiple segments.

The current strategy also depends heavily on Americans continuing to buy big gas-powered vehicles: GM, for one, is leaning into pickups despite higher fuel prices making them more expensive to own.

For now, affluent buyers are still hitting the gas—and they’ll become more important as cars themselves get more expensive to make.

Tariffs join the ride

GM expects about $2 billion in commodity inflation this year, CFO Paul Jacobson said on a call with investors, while tariff costs are tracking near the low end of a $2.5 billion to $3.5 billion forecast. Steel, aluminum, and logistics costs have risen sharply in recent months.

The carmaker has a few ways to protect margins. It can absorb some of the higher costs, squeeze suppliers, or raise prices. GM said it’s considering the latter—so if tariffs and inflation stick around, car buyers may eventually cover more of the bill.

The quarter suggests that automakers can protect profits by selling more premium mixes and cutting back on less-profitable models, but at a certain point, inflation and tariff prices will be passed on to the consumer. The next time you walk into a dealership, a Silverado’s sticker price might make you consider taking the bus. But GM has margins to protect, too.—HC