SerpApi.Org
General Motors is pivoting its business to capitalize on the Trump administration’s policy changes. Wall Street loves it.
The Detroit automaker on Tuesday raised its full-year profit forecast and reported higher revenue despite high gas prices and the fact that Americans are buying fewer cars. Executives touted plans to pour billions into expanding U.S. production of GM’s biggest vehicles, while rolling out new pickups, high-end, gas-powered Cadillacs and military trucks.
It is capitalizing on regulatory rollbacks championed by Trump that have allowed GM to dial back its most ambitious plans for money-losing electric vehicles while doubling down on profitable pickup trucks and SUVs.
Even Trump administration moves that initially boded poorly for GM—costly automotive tariffs and attacks on Iran that drove up gas prices and at first rattled its stock price—have left the automaker largely unscathed or hobbled its rivals more.
“We haven’t made excuses, we’ve just continued to perform,” GM Chief Executive Mary Barra said in a Tuesday call with analysts. GM shares are up more than 50% since Trump returned to office, with Wall Street’s enthusiasm over deregulation outweighing tariff fears.
Barra drew a barrage of presidential insults during Trump’s first term, angering him with workforce cuts and supporting California’s ability to set its own tailpipe standards. He attacked GM’s plans to invest heavily in EVs, said a move that would slash U.S. jobs was “nasty” and slammed the company for shutting a factory.
This time around, the bad blood has eased and the relationship has improved both through GM’s public positions as well as back-room bargaining. Barra, who meets directly with Trump and his top lieutenants, has been quick to get on board with his initiatives.
She praised tariffs last spring as a tool to level the playing field when the auto industry lobbied against them, and backed off plans to do away with gas-powered cars in favor of EVs within the next decade. GM still sells a lineup of EVs and is developing new ones but has shifted those plans due to weaker demand and regulatory changes.
GM, meanwhile, has spent more on federal lobbying this year than any single company.
After Trump imposed tariffs, GM pledged to spend billions on expanding U.S. production of more lucrative gas-powered trucks and SUVs. That move has paid off: While GM sold 4% fewer vehicles year-over-year in the second quarter, revenue was up 2%.
GM also has singularly embraced the Trump administration’s push to step up the auto industry’s role in weapons production.
The company has talked with Lockheed Martin about making parts for the defense contractor’s weapons and, last month, announced a general agreement between the companies to work together to bolster munitions production.
GM’s defense subsidiary is a leading contender to build a large infantry squad vehicle for the U.S. Army that would replace the Humvee. It also builds a lightweight infantry squad vehicle based on the Chevrolet Colorado pickup.
Barra said the U.S. Army plans to buy 10,000 of the trucks, pending budget approval, which includes 1,200 already ordered in a deal worth more than $1 billion.
Defense initiatives account for only a fraction of the automaker’s revenue and total production capacity, but they represent a growing business line. On Tuesday, Barra touted the division’s potential in more detail than she has on many previous calls; she said she expects $700 million in defense revenue this year, while producing double-digit margins.
Trump administration policies have proven costly at times, as with tariffs, and lucrative in other cases, such as deregulatory moves, Barclays analyst Dan Levy said. Overall, he said, GM probably comes out ahead. “They have had to do a lot of explaining in D.C.,” Levy said.
In addition to EV relief and defense work, GM scored a win with a Trump administration trade deal that kept tariffs low enough to allow the automaker to continue importing vehicles from South Korea.
The same can’t be said for some of GM’s rivals. Toyota is in the unusual position of losing money in North America due to tariffs, and Ford has taken a bigger hit than GM on Trump’s EV pullback.
Ford last year announced a massive $19.5 billion write-down primarily tied to its struggling EV unit; GM has written down about $11 billion, including $2.3 billion announced for the latest quarter. Despite those losses, both automakers have said easing fuel-economy and clean-air regulations will improve profitability.
GM and the broader U.S. industry still face potential peril. Changes Trump is proposing to America’s trade deal with Canada and Mexico could upend automotive supply chains, while persistently high gas prices and a growing U.S. affordability crisis could further chip away at GM sales. For now, Barra said, that isn’t a problem.
“It’s just not happening,” Barra said. “We’re building everything we can sell.”
GM shares rose 5% after GM disclosed its second-quarter financial results, including per-share earnings that bested Wall Street expectations. The automaker raised its full-year outlook on earnings before interest and taxes to between $14 billion and $16 billion, up from an earlier outlook of $13.5 billion to $15.5 billion.
Barra said she expects the trajectory to continue into 2027. “We have multiple engines of margin expansion and growth, while maintaining our capital discipline,” she said.
Write to Sharon Terlep at [email protected]