Latest news with #MaryBarra
The Advertiser
16 hours ago
- Automotive
- The Advertiser
GM blames Trump's tariffs for billion-dollar loss, warns larger losses on the way
General Motors (GM) has announced a $A1.68 billion loss for the second quarter (April-June) of 2025, citing uncertainty brought on by United States (US) import tariffs. In its quarterly earnings call, the automaker pinned the entire $US1.1 billion loss down to the automotive import tariffs introduced from April 2, 2025, which extended to components in May before being combined with broader 'reciprocal' tariffs. In its presentation, GM told shareholders to, "Expect Q3 [July-September] impact to be higher than Q2 due to timing of indirect tariff costs." "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," said GM CEO Mary Barra in a letter to shareholders. CarExpert can save you thousands on a new car. Click here to get a great deal. The loss is 32 per cent down on the same period in 2024, with the company's revenue falling three per cent year-on-year. With 746,588 vehicles sold between April and June, GM was the best-selling automaker in the US in the first half of 2025 with 1.4 million deliveries across its Buick, Cadillac, Chevrolet and GMC brands. Ms Barra also highlighted the $US4 million ($A6.9 billion) investment in US manufacturing, bringing an additional 300,000 vehicle production capacity. "This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models," Ms Barra said. "The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the U.S. each year as we scale." This included a US$888 million (A$1.377 billion) investment in the development of a sixth-generation small-block V8 engine at the Tonawanda Propulsion plant in Buffalo, New York. "Overall, GM is well positioned to succeed in an ICE [internal combustion engine] market that now has a longer runway," Ms Barra said. The news comes as rival Stellantis, which owns US brands including Jeep, Ram Trucks, Dodge, Chrysler among others, posted a €2.3 billion (A$4.1 billion) loss for the first six months of 2025 after a profit of €5.6 billion (A$10 billion) over the same period last year. In April, US President Donald Trump introduced 'automotive' tariffs of 25 per cent on imported vehicles, controversially including Mexico and Canada – crucial parts of a broader North American supply chain – despite GM, Ford and Stellantis asking for more time to adjust to the tariffs. Mr Trump relented somewhat, providing a one-month reprieve on tariffs for vehicles built in Canada – such as the Chevrolet Silverado – and Mexico, where Stellantis makes vehicles such as the Jeep Wagoneer S. In May, a tariff on components was also applied, which was also layered with country-specific 'reciprocal' tariffs, meaning tariffs on materials – such as imported steel – would attract additional tariffs. Analysts predicted the average cost of a new vehicle could increase by as much as $US12,000 ($A18,250), while President Trump said the tariffs were intended to grow US manufacturing. "Ultimately, more production at home will mean stronger competition and lower prices for consumers," President Trump told media in a press conference announcing the tariffs on April 2, 2025. GM says average transaction prices have increased to $US51,000 ($A77,570) and expects to raise prices between 0.5-1.0 per cent this year. MORE: Peugeot, Ram parent posts A$4.1 billion loss, forecasts more tariff trouble MORE: Reciprocal tariffs on US trading partners will have 'ripple effects' on Australia Content originally sourced from: General Motors (GM) has announced a $A1.68 billion loss for the second quarter (April-June) of 2025, citing uncertainty brought on by United States (US) import tariffs. In its quarterly earnings call, the automaker pinned the entire $US1.1 billion loss down to the automotive import tariffs introduced from April 2, 2025, which extended to components in May before being combined with broader 'reciprocal' tariffs. In its presentation, GM told shareholders to, "Expect Q3 [July-September] impact to be higher than Q2 due to timing of indirect tariff costs." "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," said GM CEO Mary Barra in a letter to shareholders. CarExpert can save you thousands on a new car. Click here to get a great deal. The loss is 32 per cent down on the same period in 2024, with the company's revenue falling three per cent year-on-year. With 746,588 vehicles sold between April and June, GM was the best-selling automaker in the US in the first half of 2025 with 1.4 million deliveries across its Buick, Cadillac, Chevrolet and GMC brands. Ms Barra also highlighted the $US4 million ($A6.9 billion) investment in US manufacturing, bringing an additional 300,000 vehicle production capacity. "This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models," Ms Barra said. "The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the U.S. each year as we scale." This included a US$888 million (A$1.377 billion) investment in the development of a sixth-generation small-block V8 engine at the Tonawanda Propulsion plant in Buffalo, New York. "Overall, GM is well positioned to succeed in an ICE [internal combustion engine] market that now has a longer runway," Ms Barra said. The news comes as rival Stellantis, which owns US brands including Jeep, Ram Trucks, Dodge, Chrysler among others, posted a €2.3 billion (A$4.1 billion) loss for the first six months of 2025 after a profit of €5.6 billion (A$10 billion) over the same period last year. In April, US President Donald Trump introduced 'automotive' tariffs of 25 per cent on imported vehicles, controversially including Mexico and Canada – crucial parts of a broader North American supply chain – despite GM, Ford and Stellantis asking for more time to adjust to the tariffs. Mr Trump relented somewhat, providing a one-month reprieve on tariffs for vehicles built in Canada – such as the Chevrolet Silverado – and Mexico, where Stellantis makes vehicles such as the Jeep Wagoneer S. In May, a tariff on components was also applied, which was also layered with country-specific 'reciprocal' tariffs, meaning tariffs on materials – such as imported steel – would attract additional tariffs. Analysts predicted the average cost of a new vehicle could increase by as much as $US12,000 ($A18,250), while President Trump said the tariffs were intended to grow US manufacturing. "Ultimately, more production at home will mean stronger competition and lower prices for consumers," President Trump told media in a press conference announcing the tariffs on April 2, 2025. GM says average transaction prices have increased to $US51,000 ($A77,570) and expects to raise prices between 0.5-1.0 per cent this year. MORE: Peugeot, Ram parent posts A$4.1 billion loss, forecasts more tariff trouble MORE: Reciprocal tariffs on US trading partners will have 'ripple effects' on Australia Content originally sourced from: General Motors (GM) has announced a $A1.68 billion loss for the second quarter (April-June) of 2025, citing uncertainty brought on by United States (US) import tariffs. In its quarterly earnings call, the automaker pinned the entire $US1.1 billion loss down to the automotive import tariffs introduced from April 2, 2025, which extended to components in May before being combined with broader 'reciprocal' tariffs. In its presentation, GM told shareholders to, "Expect Q3 [July-September] impact to be higher than Q2 due to timing of indirect tariff costs." "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," said GM CEO Mary Barra in a letter to shareholders. CarExpert can save you thousands on a new car. Click here to get a great deal. The loss is 32 per cent down on the same period in 2024, with the company's revenue falling three per cent year-on-year. With 746,588 vehicles sold between April and June, GM was the best-selling automaker in the US in the first half of 2025 with 1.4 million deliveries across its Buick, Cadillac, Chevrolet and GMC brands. Ms Barra also highlighted the $US4 million ($A6.9 billion) investment in US manufacturing, bringing an additional 300,000 vehicle production capacity. "This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models," Ms Barra said. "The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the U.S. each year as we scale." This included a US$888 million (A$1.377 billion) investment in the development of a sixth-generation small-block V8 engine at the Tonawanda Propulsion plant in Buffalo, New York. "Overall, GM is well positioned to succeed in an ICE [internal combustion engine] market that now has a longer runway," Ms Barra said. The news comes as rival Stellantis, which owns US brands including Jeep, Ram Trucks, Dodge, Chrysler among others, posted a €2.3 billion (A$4.1 billion) loss for the first six months of 2025 after a profit of €5.6 billion (A$10 billion) over the same period last year. In April, US President Donald Trump introduced 'automotive' tariffs of 25 per cent on imported vehicles, controversially including Mexico and Canada – crucial parts of a broader North American supply chain – despite GM, Ford and Stellantis asking for more time to adjust to the tariffs. Mr Trump relented somewhat, providing a one-month reprieve on tariffs for vehicles built in Canada – such as the Chevrolet Silverado – and Mexico, where Stellantis makes vehicles such as the Jeep Wagoneer S. In May, a tariff on components was also applied, which was also layered with country-specific 'reciprocal' tariffs, meaning tariffs on materials – such as imported steel – would attract additional tariffs. Analysts predicted the average cost of a new vehicle could increase by as much as $US12,000 ($A18,250), while President Trump said the tariffs were intended to grow US manufacturing. "Ultimately, more production at home will mean stronger competition and lower prices for consumers," President Trump told media in a press conference announcing the tariffs on April 2, 2025. GM says average transaction prices have increased to $US51,000 ($A77,570) and expects to raise prices between 0.5-1.0 per cent this year. MORE: Peugeot, Ram parent posts A$4.1 billion loss, forecasts more tariff trouble MORE: Reciprocal tariffs on US trading partners will have 'ripple effects' on Australia Content originally sourced from: General Motors (GM) has announced a $A1.68 billion loss for the second quarter (April-June) of 2025, citing uncertainty brought on by United States (US) import tariffs. In its quarterly earnings call, the automaker pinned the entire $US1.1 billion loss down to the automotive import tariffs introduced from April 2, 2025, which extended to components in May before being combined with broader 'reciprocal' tariffs. In its presentation, GM told shareholders to, "Expect Q3 [July-September] impact to be higher than Q2 due to timing of indirect tariff costs." "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," said GM CEO Mary Barra in a letter to shareholders. CarExpert can save you thousands on a new car. Click here to get a great deal. The loss is 32 per cent down on the same period in 2024, with the company's revenue falling three per cent year-on-year. With 746,588 vehicles sold between April and June, GM was the best-selling automaker in the US in the first half of 2025 with 1.4 million deliveries across its Buick, Cadillac, Chevrolet and GMC brands. Ms Barra also highlighted the $US4 million ($A6.9 billion) investment in US manufacturing, bringing an additional 300,000 vehicle production capacity. "This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models," Ms Barra said. "The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the U.S. each year as we scale." This included a US$888 million (A$1.377 billion) investment in the development of a sixth-generation small-block V8 engine at the Tonawanda Propulsion plant in Buffalo, New York. "Overall, GM is well positioned to succeed in an ICE [internal combustion engine] market that now has a longer runway," Ms Barra said. The news comes as rival Stellantis, which owns US brands including Jeep, Ram Trucks, Dodge, Chrysler among others, posted a €2.3 billion (A$4.1 billion) loss for the first six months of 2025 after a profit of €5.6 billion (A$10 billion) over the same period last year. In April, US President Donald Trump introduced 'automotive' tariffs of 25 per cent on imported vehicles, controversially including Mexico and Canada – crucial parts of a broader North American supply chain – despite GM, Ford and Stellantis asking for more time to adjust to the tariffs. Mr Trump relented somewhat, providing a one-month reprieve on tariffs for vehicles built in Canada – such as the Chevrolet Silverado – and Mexico, where Stellantis makes vehicles such as the Jeep Wagoneer S. In May, a tariff on components was also applied, which was also layered with country-specific 'reciprocal' tariffs, meaning tariffs on materials – such as imported steel – would attract additional tariffs. Analysts predicted the average cost of a new vehicle could increase by as much as $US12,000 ($A18,250), while President Trump said the tariffs were intended to grow US manufacturing. "Ultimately, more production at home will mean stronger competition and lower prices for consumers," President Trump told media in a press conference announcing the tariffs on April 2, 2025. GM says average transaction prices have increased to $US51,000 ($A77,570) and expects to raise prices between 0.5-1.0 per cent this year. MORE: Peugeot, Ram parent posts A$4.1 billion loss, forecasts more tariff trouble MORE: Reciprocal tariffs on US trading partners will have 'ripple effects' on Australia Content originally sourced from:
Yahoo
16 hours ago
- Automotive
- Yahoo
General Motors CFO: Agility is a key strength as tariffs deliver $1.1 billion hit in Q2
Good morning. At the start of Q2 earnings season, investors looked for tariff-related impacts on profits. Major U.S. financial firms reported only limited effects—especially compared to the auto industry. General Motors (No. 18 on the Fortune 500) reported its Q2 earnings results on Tuesday. The company's net income fell 35% from the same period last year, as higher costs and uncertainty surrounding the Trump administration's automotive tariffs resulted in a $1.1 billion hit to its bottom line. 'We're still tracking to offset at least 30% of the $4 billion to $5 billion full-year 2025 tariff impact through strategic actions such as manufacturing adjustments, targeted cost initiatives, and consistent pricing,' GM CFO Paul Jacobson said during the earnings call. Adjusted automotive free cash flow was $2.8 billion, down $2.5 billion year over year, primarily due to tariff payments as well as headwinds from working capital and lower dealer inventory, Jacobson said. CEO Mary Barra added that GM's tariff burden would be lower if tariffs with Mexico, Canada, and Korea were reduced. President Donald Trump imposed a 25% tariff on all imported cars and auto parts, effective in early April. Vehicles assembled in the U.S. are eligible for partial tariff offsets, allowing automakers to receive reimbursement on a portion of tariffs paid for foreign-made parts used in U.S.-built vehicles. Despite year-over-year declines in revenue and ongoing tariff pressures, GM outperformed market expectations across major metrics: Total revenue reached $47.12 billion, down about 2% year over year, but exceeding Wall Street's estimate of $46.25 billion. Adjusted EBIT was $3.04 billion (down $1.4 billion year-over-year), topping analyst expectations of $2.84 billion. Earnings per share were $2.53, also ahead of the consensus estimate of $2.34. Notably, U.S. sales rose 7%, and the company continued to command strong pricing on pickup trucks and SUVs. A focus on agility GM remains confident that total tariff expenses will decline as new bilateral trade deals emerge and as sourcing and production adjustments are made, Jacobson noted. 'Our agility and responsiveness to evolving consumer preferences and regulatory demands remain key strengths that set us apart,' he said. Agility is a particularly relevant concept, as it is now widely regarded as essential for CFOs amid economic volatility, regulatory pressures, shifting supply chains, and rapidly changing market conditions. 'As we navigate an era of unreliability, fast actions may differentiate winners from losers,' according to Paul Melville, national managing principal of CFO advisory for Grant Thornton Advisors. The firm's latest CFO survey finds that agile CFOs can adapt strategies quickly, enabling companies to pivot in response to disruptions. The most popular tactics to reduce tariff impacts are adjusting supply chains, conducting frequent scenario planning, implementing cost-saving technologies, and raising prices. However, Jacobson told CNBC that he's not expecting any specific price increases related to tariffs. Wedbush analysts see an upside for GM. 'While the tariff headlines continue to put further pressure on the bottom line for the foreseeable future, we believe Barra & Co. continues to impressively navigate the complex backdrop,' the analysts wrote in a note to investors Tuesday, adding that this is occurring amid continued high demand for GM's entire fleet of EVs and internal combustion engine vehicles. The analysts also noted that, in order to mitigate the long-term impact of tariffs, GM is investing $4 billion to build new U.S. assembly plants—with production set to begin in 2027. Wedbush maintains its Outperform investors look to the future, all eyes will be on GM's ability to stay one step ahead in a rapidly changing market environment. Sheryl This story was originally featured on
Yahoo
16 hours ago
- Automotive
- Yahoo
General Motors' EV sales rose 111%, reflecting an industry-wide push to beat Trump's tax credit deadline
Q2 earnings beat economists' expectations, in part due to the company's electric-vehicle sales more than doubling. The automaker's Chevrolet took the No. 2 spot in the U.S. EV market, behind Elon Musk's Tesla. Experts tell Fortune a surge in EV sales come as EV makers push to offload their inventory ahead of the Trump administration's end to clean vehicle tax credits. Switch Auto Insurance and Save Today! Great Rates and Award-Winning Service The Insurance Savings You Expect Affordable Auto Insurance, Customized for You General Motors beat economists' Q2 earnings estimates, in part due to a 111% surge in EV sales. The automaker recorded $3.04 billion in adjusted earnings before interest and taxes on Tuesday, a marked 31.6% decrease from last year's Q2 $4.43 billion. Yet, GM beat StreetAccount estimates of $2.89 billion as the company's electric-vehicle sales more than doubled in the second quarter, according to its earnings release. Chevrolet took the No. 2 spot in the U.S. EV market in Q2, behind Elon Musk's Tesla. On an investor call Tuesday, CEO Mary Barra attributed the EV sales growth to the company's 'very strategic EV portfolio,' which includes luxury EV leader Cadillac. But, experts tell Fortune a broader push by EV makers to offload inventory before consumer tax credits expire at the end of September has helped inflate EV sales for the past couple months. 'EV incentives were absolutely crazy' in the months leading up to the EV tax credit deadline, Aharon Horwitz, CEO of Fullpath, a customer data and experience platform for car dealerships, told Fortune. The Inflation Reduction Act of 2022 gives EV buyers the chance to qualify for a clean vehicle tax credit of up to $7,500 for new EVs and $4,000 for used EVs purchased from 2023 to 2032. Eligibility depends on the buyers' gross income and the tax credit amount depends on critical minerals and battery components requirements. But, the Trump-approved One Big Beautiful Bill Act nixes tax incentives for buying EVs—and these consumer credits expire Sept. 30. In response, car sellers are willing to be 'very aggressive to get EVs off the lot before all the credits expire,' Horwitz said. For instance, one California dealership offers a $99 per month lease on Volkswagen's 2025 ID.4 for 24 months and a $2,995 downpayment. According to the dealer, the offer includes a $5,000 cash back bonus. Similarly, a Michigan dealership offers a Chevrolet 2025 Equinox EV LT lease for $101 per month with a $1,999 downpayment, or $189 per month lease for 24 months with a $0 downpayment. 'Incentives as a percentage of average transaction price were more than two percentage points below the industry average,' GM CEO Barra said during Tuesday's earnings call. Still, Chevrolet's website urges potential EV buyers to 'Don't Wait — Act Now' before the tax credit deadline. GM's EV business outlook GM captured 16% of the U.S. EV market in Q2. Still a far cry from Tesla's estimated 45.2% market share in the first two months of this year, the company announced record EV sales in the first half driven by Hummer and Sierra EV sales up 134%. GM aims to pioneer a new 'groundbreaking' EV battery technology the automaker says will reduce costs and boost profitability of its largest electric SUVs and trucks by 2028, CNBC reported in May. In a Q4 letter to shareholders in January, Barra described GM's EV business as 'variable profit positive' for the first time—meaning revenues from its EVs exceeded the fixed costs of manufacturing the vehicles, including labor and building materials. Barra said Tuesday she expects an EV sales 'pull ahead' before the September tax credit deadline, telling investors once 2026 comes along, the automaker will 'start to understand what real EV demand is.' 'What we're investing going forward is largely focused on improving our EV profitability,' Barra said. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Automotive
- Yahoo
Morgan Stanley's blunt challenge to GM CEO Mary Barra: ‘How does GM expect to be profitable with EVs when players like Tesla apparently cannot?'
Wall Street was unimpressed by General Motors' Q2 earnings call. On the call, a Morgan Stanley analyst asked CEO Mary Barra: 'How does GM expect to be profitable with EVs when players like Tesla apparently cannot?' Separately, Piper Sandler told clients that GM stock won't break free of its bargain-basement multiple of five times next year's forecast earnings if management is only tinkering around on the edges. The company needs a thesis-changing strategy like humanoid robots, it said. General Motors and its legacy auto industry peers need a bold strategy for the future if they ever want investors to rethink their growth prospects, investment bank Piper Sandler warned on Tuesday. Otherwise their collective tinkering around on the edges with cost cuts here and inventory changes there amount to little more than rearranging the deck chairs on the Titanic, the bank implied. And Morgan Stanley analyst Adam Jonas had a blunt statement for CEO Mary Barra, comparing her company unfavorably with Tesla in the Q&A section of the earnings call. Shares in GM tumbled 8% after second-quarter adjusted net profit fell by a sixth, owing in part to a $1.1 billion hit from the Trump administration's tariffs. It comes after fellow Detroit carmaker Stellantis, the parent of Jeep and Ram, preannounced results for the first six months that revealed it swung to a €2.3 billion ($2.7 billion) loss from a net profit of €5.6 billion the prior year. A major uncertainty clouding the outlook for GM's North American profits moving forward remains the impact of import duties. As a result, on Tuesday, Piper Sandler warned clients it's possible that GM could end up closer to the $8.25 in adjusted earnings per share for this year rather than the upper bound of $10 in its forecast range. 'But to us, these aren't thesis-defining issues. More problematic, in our view, is that the call focused almost entirely on tactical or cyclical topics,' it wrote in a research note. Only worth paying five times next year's earnings for GM, bank argues The bank gave as an example issues like incentive spending, inventory levels, and cost offsets with regard to tariffs to name just one example. GM imports the popular Chevrolet Equinox and Cadillac Optiq EVs from Mexico. Both saw a surge in Q2 demand potentially reflecting pull-forward effects as dealers stocked up on inventory before the 25% auto sector tariffs hit, and as customers bought EVs before the Sept. 30 deadline for the end of the federal EV credit, discontinued by the Trump administration. 'In our view, if GM and other traditional automakers want to emerge from their multiyear funk, they don't need smart tactics,' Piper Sandler continued, 'they need bold strategic changes.' Otherwise the bank will continue to view GM share based on the same $48 price target that represents five times next year's forecast earnings. Shares in GM first listed on the New York Stock Exchange back in November 2010. At the time, the company boasted what it called a 'fortress balance sheet' free of legacy risks like pension and health care obligations for staff and retirees that helped plunge it into bankruptcy the year prior. Yet investors that bought in at the IPO price of $33 have not been rewarded relative to the broader equity market. The stock has averaged just a 2.6% annual compound return in the subsequent 15 years versus 11.8% with the S&P 500. 'How does GM expect to be profitable with EVs when players like Tesla apparently cannot?' By comparison, Piper Sandler views Tesla, a $1 trillion–plus megacap company in the Magnificent Seven stock group, as being fairly valued at 140 times its estimated 2026 earnings. A major reason for that lofty multiple is Tesla's efforts in the area of artificial intelligence and humanoid robotics. In a research note published this weekend, Piper Sandler argued a further geographic expansion of the Austin area serviced by Tesla's new AI-powered robotaxi fleet (generally estimated to still include only a dozen cars) was likely favorable enough to overshadow any negative revisions to forecast earnings. CEO Elon Musk's company is due to report quarterly earnings after the close of markets on Wednesday. GM did not respond to a Fortune request for comment made outside normal working hours. But the carmaker's CEO, Mary Barra, faced scrutiny from analysts during her Q2 conference call, with another Tesla bull asking, where are its humanoid robots? 'Elon seems to be also exiting the auto industry, clearly pulling capital out of the business and doubling down on AI, autonomy, and robotaxis,' Morgan Stanley analyst Adam Jonas said during the Tuesday investor call. 'So how does GM expect to be profitable with EVs when players like Tesla apparently cannot?' Barra replied there were partnerships 'we're looking at' in the field of automation, but that when it comes to the subject, GM is mainly interested in improving efficiency at its automobile factories. 'Overall, we're focused on what's going to drive manufacturing optimization,' GM's CEO answered. This story was originally featured on Sign in to access your portfolio
Yahoo
a day ago
- Automotive
- Yahoo
Morgan Stanley's blunt challenge to GM CEO Mary Barra: ‘How does GM expect to be profitable with EVs when players like Tesla apparently cannot?'
Wall Street was unimpressed by General Motors' Q2 earnings call. On the call, a Morgan Stanley analyst asked CEO Mary Barra: 'How does GM expect to be profitable with EVs when players like Tesla apparently cannot?' Separately, Piper Sandler told clients that GM stock won't break free of its bargain-basement multiple of five times next year's forecast earnings if management is only tinkering around on the edges. The company needs a thesis-changing strategy like humanoid robots, it said. General Motors and its legacy auto industry peers need a bold strategy for the future if they ever want investors to rethink their growth prospects, investment bank Piper Sandler warned on Tuesday. Otherwise their collective tinkering around on the edges with cost cuts here and inventory changes there amount to little more than rearranging the deck chairs on the Titanic, the bank implied. And Morgan Stanley analyst Adam Jonas had a blunt statement for CEO Mary Barra, comparing her company unfavorably with Tesla in the Q&A section of the earnings call. Shares in GM tumbled 8% after second-quarter adjusted net profit fell by a sixth, owing in part to a $1.1 billion hit from the Trump administration's tariffs. It comes after fellow Detroit carmaker Stellantis, the parent of Jeep and Ram, preannounced results for the first six months that revealed it swung to a €2.3 billion ($2.7 billion) loss from a net profit of €5.6 billion the prior year. A major uncertainty clouding the outlook for GM's North American profits moving forward remains the impact of import duties. As a result, on Tuesday, Piper Sandler warned clients it's possible that GM could end up closer to the $8.25 in adjusted earnings per share for this year rather than the upper bound of $10 in its forecast range. 'But to us, these aren't thesis-defining issues. More problematic, in our view, is that the call focused almost entirely on tactical or cyclical topics,' it wrote in a research note. Only worth paying five times next year's earnings for GM, bank argues The bank gave as an example issues like incentive spending, inventory levels, and cost offsets with regard to tariffs to name just one example. GM imports the popular Chevrolet Equinox and Cadillac Optiq EVs from Mexico. Both saw a surge in Q2 demand potentially reflecting pull-forward effects as dealers stocked up on inventory before the 25% auto sector tariffs hit, and as customers bought EVs before the Sept. 30 deadline for the end of the federal EV credit, discontinued by the Trump administration. 'In our view, if GM and other traditional automakers want to emerge from their multiyear funk, they don't need smart tactics,' Piper Sandler continued, 'they need bold strategic changes.' Otherwise the bank will continue to view GM share based on the same $48 price target that represents five times next year's forecast earnings. Shares in GM first listed on the New York Stock Exchange back in November 2010. At the time, the company boasted what it called a 'fortress balance sheet' free of legacy risks like pension and health care obligations for staff and retirees that helped plunge it into bankruptcy the year prior. Yet investors that bought in at the IPO price of $33 have not been rewarded relative to the broader equity market. The stock has averaged just a 2.6% annual compound return in the subsequent 15 years versus 11.8% with the S&P 500. 'How does GM expect to be profitable with EVs when players like Tesla apparently cannot?' By comparison, Piper Sandler views Tesla, a $1 trillion–plus megacap company in the Magnificent Seven stock group, as being fairly valued at 140 times its estimated 2026 earnings. A major reason for that lofty multiple is Tesla's efforts in the area of artificial intelligence and humanoid robotics. In a research note published this weekend, Piper Sandler argued a further geographic expansion of the Austin area serviced by Tesla's new AI-powered robotaxi fleet (generally estimated to still include only a dozen cars) was likely favorable enough to overshadow any negative revisions to forecast earnings. CEO Elon Musk's company is due to report quarterly earnings after the close of markets on Wednesday. GM did not respond to a Fortune request for comment made outside normal working hours. But the carmaker's CEO, Mary Barra, faced scrutiny from analysts during her Q2 conference call, with another Tesla bull asking, where are its humanoid robots? 'Elon seems to be also exiting the auto industry, clearly pulling capital out of the business and doubling down on AI, autonomy, and robotaxis,' Morgan Stanley analyst Adam Jonas said during the Tuesday investor call. 'So how does GM expect to be profitable with EVs when players like Tesla apparently cannot?' Barra replied there were partnerships 'we're looking at' in the field of automation, but that when it comes to the subject, GM is mainly interested in improving efficiency at its automobile factories. 'Overall, we're focused on what's going to drive manufacturing optimization,' GM's CEO answered. This story was originally featured on
