General Motors (NYSE:GM) executives highlighted market share gains, strong cash generation and expanded shareholder returns during the company’s fourth-quarter and full-year 2025 earnings call held Tuesday. Management also detailed major EV-related charges taken in the second half of 2025, outlined steps to reduce tariff exposure, and issued 2026 guidance that targets a return to 8%-10% adjusted EBIT margins in North America.
2025 performance and U.S. market share gains
CEO Mary Barra said the company delivered “an exceptional 2025,” including full-year EBIT-adjusted results at the high end of guidance. Barra noted the company achieved its highest full-year U.S. market share in a decade and posted a fourth consecutive year of share growth, which she attributed to “low inventory, low incentives, and strong pricing.” GM again led the industry in full-size pickups and full-size SUVs, and posted its best year ever in crossovers, citing redesigned Chevrolet Equinox and Traverse models as drivers.
Cash generation, capital returns, and a higher dividend
CFO Paul Jacobson reported 2025 EBIT adjusted of $12.7 billion and adjusted automotive free cash flow of $10.6 billion, ending the year with $21.7 billion in cash. Jacobson said market share gains of 60 basis points in 2025, combined with low incentives and disciplined inventory management, contributed to nearly $25 billion of free cash flow over the past two years.
GM emphasized shareholder returns as a key element of its capital allocation framework. In the fourth quarter, the company executed $2.5 billion in open-market share repurchases, bringing total 2025 buybacks to $6 billion. The company also distributed more than $500 million in dividends in 2025.
Jacobson said that since announcing an accelerated share repurchase program in November 2023, GM has returned $23 billion through repurchases, reducing diluted shares by more than 465 million, or nearly 35%, to approximately 930 million diluted shares outstanding at year-end 2025. The board approved a new $6 billion share repurchase authorization and a 20% dividend increase to $0.18 per share.
Tariffs, EV capacity actions, and sizable EV-related charges
Management discussed tariff exposure and mitigation efforts. Jacobson said GM incurred $3.1 billion of gross tariff costs in 2025—below its prior expectation range of $3.5 billion to $4.5 billion. He attributed the result to execution and policy developments, including the benefit of a lower tariff rate for Korea, and said GM offset more than 40% of gross tariff costs through go-to-market actions, footprint adjustments and cost reductions.
In addition, GM described actions taken to align EV capacity with softer demand and policy changes, including the termination of certain consumer tax incentives. Jacobson said GM recorded $1.6 billion of charges in the third quarter and an additional $6 billion in the fourth quarter tied to EV capacity and footprint decisions. The Q4 charges included $1.8 billion of non-cash impairments “largely driven” by discontinuing the BrightDrop electric van and impairing certain EV-related assets, plus $4.2 billion primarily related to contract cancellations and supplier settlements.
Combined Q3 and Q4 EV-related charges totaled $7.6 billion, of which $4.6 billion is expected to be settled in cash. GM paid about $400 million in 2025 and expects to pay the majority of the remaining cash balance in 2026. Jacobson added that, besides BrightDrop, the company has not impaired its existing retail EV portfolio, and said GM is focused on improving EV profitability through battery technology, engineering improvements and operational efficiencies.
Fourth-quarter results and regional highlights
For the fourth quarter, GM reported total revenue of $45 billion, down about 5% year over year. Jacobson said the decline reflected disciplined production and inventory management, aligning EV production to demand, production constraints on the Chevrolet Trax, and headwinds from ending production of the Chevrolet Malibu and Cadillac XT4. He added that the lower volume was partially offset by strong pricing across the 2026 model-year lineup.
Fourth-quarter EBIT adjusted was $2.8 billion and adjusted diluted EPS was $2.51, both up year over year despite tariff impacts. Adjusted automotive free cash flow was $2.8 billion.
By region, North America delivered fourth-quarter EBIT adjusted of $2.2 billion and a 6.1% margin, with dealer inventory ending at 48 days versus the company’s 50-60 day target range. GM International (excluding China equity income) generated $200 million of EBIT adjusted, supported by South America and the Middle East. China equity income was $100 million excluding a restructuring charge; the company recorded a $600 million special item in China equity income tied primarily to prior restructuring actions, and Jacobson said these charges are not expected to require capital from GM because the joint venture has sufficient cash.
GM Financial posted fourth-quarter EBIT adjusted of $600 million, down slightly year over year, and full-year EBIT adjusted of $2.8 billion, within its $2.5 billion to $3.0 billion guidance range. Jacobson said GM Financial paid $1.5 billion in dividends to GM. GM Financial CEO Susan Sheffield said the unit received conditional approval for an industrial bank, enabling it to accept deposits as an additional funding source, which she said should help lower cost of funds over time, though “probably not” by 100 basis points.
2026 outlook: higher earnings, tariff headwinds, and margin recovery target
GM guided for 2026 EBIT adjusted of $13 billion to $15 billion, adjusted diluted EPS of $11 to $13, and adjusted automotive free cash flow of $9 billion to $11 billion. The company expects gross tariff costs of $3 billion to $4 billion in 2026, and a first-quarter tariff impact of $750 million to $1.0 billion. Management said it expects to sustain tariff offsets achieved in 2025 and believes additional actions can further mitigate impact, with Jacobson stating the company expects net tariff exposure to be lower in 2026 than in 2025.
Additional 2026 planning assumptions and drivers discussed on the call included:
- U.S. SAAR expected in the low 16 million unit range.
- North America ICE wholesale volumes expected to be flat to up modestly, constrained by portfolio shifts (including ending Cadillac XT6) and downtime ahead of Chevrolet Silverado and GMC Sierra launches.
- A $1.0 billion to $1.5 billion benefit related to actions taken to right-size EV capacity, and lower EV wholesale volumes improving mix and cost.
- North America pricing expected to be flat to up 0.5%, which management described as primarily the annualization of 2025 pricing actions tied to model-year 2026.
- Expected regulatory benefit of $500 million to $750 million, primarily from no longer needing to purchase compliance credits; Jacobson noted CAFE penalties have been “zeroed out,” while greenhouse gas changes are still pending and may have lag effects.
- Warranty costs expected to deliver a $1 billion benefit versus 2025, with executives pointing to improving monthly cash trends and actions taken on key issues, including V8-related work described as involving an oil change and dealership testing.
- About $400 million of incremental high-margin revenue from expanded OnStar software and services, including Super Cruise, with deferred revenue expected to rise from $5.4 billion at the end of 2025 to about $7.5 billion by end of 2026.
- Headwinds of $1.0 billion to $1.5 billion tied to onshoring vehicle production, supply-chain resiliency and software initiatives, plus another $1.0 billion to $1.5 billion from commodities (including aluminum and copper), higher DRAM costs and foreign exchange.
Barra and Jacobson reiterated confidence in returning North America to 8%-10% adjusted EBIT margins in 2026. Barra said GM will continue investing in EV cost reductions, including its planned LMR battery chemistry, while maintaining a strong internal combustion portfolio and evaluating hybrids in “key segments” based on demand. On software and services, Jacobson said Super Cruise revenue growth reflects increased production of equipped vehicles with three years of prepaid services as well as renewal rates in the “low 40% range” at the end of the initial period.
About General Motors (NYSE:GM)
General Motors Company (NYSE: GM) is a global automotive manufacturer headquartered in Detroit, Michigan, that designs, builds and sells cars, trucks, crossovers and electric vehicles, and provides related parts and services. Founded in 1908, GM has long been one of the world’s largest automakers and has evolved into a multi-brand company whose primary marques include Chevrolet, GMC, Cadillac and Buick. Beyond vehicle manufacturing, GM’s operations encompass vehicle financing, connected services and advanced mobility initiatives.
GM develops and markets a broad portfolio of products and technologies, including internal-combustion and battery-electric vehicles, vehicle components and on-board connectivity services.
