2025 General Motors Q2 earnings takes $1.1B hit from tariffs: Full-size trucks, SUVs limit exposure

The 2025 General Motors Q2 earnings report shows a $1.1 billion hit from tariffs as the automaker leaned on full-size truck and SUVs to limit exposure to their impact.

2025 General Motors Q2 earnings

GM CEO Mary Barra’s letter to shareholders highlights its vehicles appeal to consumers, technologies like OnStar and SuperCruise, staying the course on electric vehicles despite slowing sales and global improvements in markets like China which reported a second consecutive quarter of year-over-year sales growth.

“In addition to our strong underlying operating performance, we are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape,” GM CEO Barra said in the letter.

The company’s core profit fell 31.6% to $3.04 billion as reported by CNBC.com and full-year guidance includes a reported $4-5 billion tariff-related impact on earnings mainly due to its Korea business. The Korea business accounts for $2 billion of the total expected tariff hit for the year.

GM builds the Chevrolet Trax, Chevrolet Trailblazer, Buick Encore GX and Buick Envista in Korea, and they are imported into the U.S. They are subject to a 25% tariff since they are a foreign-built vehicle.

GM trucks, SUVs mitigate impact of tariffs

One of the ways GM worked to mitigate the impacts of the tariffs was through building up inventory before tariffs took effect as well as moving some production around.

First, GM built additional volume of vehicles, as reported by Autonews.com, and stashed this inventory prior to the tariffs.

Second, GM has been actively working to move inventory around and change plans. It has plans to add more seasonal staff at Fort Wayne Assembly to build more Chevy Silverado 1500 and GMC Sierra 1500 during the traditional slower summer downtime. Also, it is planning on slowing production in Silao, Mexico, and in it May returned to two shifts at the Oshawa, Canada, plant in response to the “evolving trade environment.” Both of those plants build GM full-size trucks.

Finally, GM has changed plans to build electric vehicles at the Orion Assembly Center, Orion, Michigan, and will instead build Chevy Silverado 1500, GMC Sierra 1500 and Cadillac Escalades by 2027.

“In the United States, we continue to lead the industry in full-size trucks and SUVs, and the 10 all-new or redesigned crossover SUVs we have introduced like the Chevrolet Trax, Buick Envista, and GMC Acadia took huge leaps forward in design and technology, resulting in record demand and revenue growth, while reduced complexity contributed to stronger profitability,” GM CEO Barra said in the letter.

These are all highly profitable vehicles that will allow them to offset the tariffs placed on the Korean-built SUVs with lower profits.

Our take

GM is doing what it can to limit exposure to tariffs that are impacting the entire automotive industry. Whole-scale changes are very difficult with moving a plant running upwards of $5 billion and 5-7 years of time to get it into operation — that’s in addition to finding staff to work at the plant. Shifting production and limiting some production are much easier steps to take in the interim.