General Motors cut its 2025 profit forecast by more than 20% on Thursday, saying that Trump administration tariffs would increase costs from $4 billion to $5 billion this year.
In a conference call with analysts, GM executives said the company expects it to make $8.2 billion to $10.1 billion this year, falling from its previous $12.5 billion forecast from $11.2 billion.
“GM's business is essentially strong as it adapts to the new trade policy environment,” said Mary T. Bala, the company's CEO.
In April, President Trump will impose a 25% tariff on imported vehicles and begin to impose the same obligation on imported automobile parts on Saturday. On Tuesday, the president revised how tariffs would be applied to provide some relief to automakers, including partial refunds for customs duties on imported parts over two years.
Barra said GM wants to offset roughly 30% of the impact of tariffs by increasing production at its US factories, reducing costs and working with suppliers to increase domestic production of parts and components.
GM previously said it was increasing production of pickup trucks at its factory near Fort Wayne, Indiana. This reduces the number of vehicles imported from Canada and Mexico. Barra said Fort Wayne Factory produce will increase around 50,000 trucks this year.
She also said GM plans to create more battery modules in US plants to increase some of the domestic content of electric vehicles.
A rise in tariff-related costs of around $2 billion will increase from vehicles made in Canada, Mexico and South Korea and sold in the US.
Analysts predict that tariffs will add thousands of dollars to the costs of new cars and trucks, with some or all of them being handed over to consumers. In the call, GM's Chief Financial Officer Paul Jacobson added that the company expects new vehicle prices to rise 0.5% this year and 1% this year. Previously, the company predicted its pricing would fall by 1% to 1.5%.
Other automakers are also planning to produce more vehicles in the US. Mercedes-Benz said Thursday that it will build new vehicles at its Alabama plant as part of what the German automaker calls a “deepening commitment” to US manufacturing.
The company has not mentioned tariffs, but Mercedes and other automakers have been in pain over the past few weeks highlighting the number of cars they are already building in the US and plans to do more. Mercedes did not provide details about the car except that it would be a new design that will begin production in 2027 for the US market.
The company's factory, near Tuscaloosa, Alabama, assembles luxury sports utility vehicles, including electrical models sold primarily in the US and exported to other markets.
Jack Ewing Reports of contributions.
