General Motors Company (NYSE:GM) Q4 2025 Earnings call January 27, 2026 08:30 AM ET Company ParticipantsAndrew Percoco - Executive Director of Equity ResearchAshish Kohli - VP of Investor RelationsJames Picariello - Director and Head of U.S. Autos ResearchJoe Spak - Managing DirectorMary Barra - Chair and CEOPaul Jacobson - EVP and CFOSusan Sheffield - President and CEOConference Call ParticipantsColin Langan - Automotive & Mobility AnalystDan Levy - Senior Equity Research AnalystEmmanuel Rosner - Managing ...

Financial Data and Key Metrics Changes - In 2025, the company achieved an EBIT adjusted of $12.7 billion and adjusted automotive free cash flow of $10.6 billion, resulting in a year-end cash balance of $21.7 billion [15][18] - Total company revenue for Q4 2025 was $45 billion, down approximately 5% year-over-year, primarily due to disciplined production and dealer inventory management [18] - EBIT adjusted for Q4 was $2.8 billion, and diluted adjusted EPS was $2.51, both increasing year-over-year despite tariff impacts [18][19] Business Line Data and Key Metrics Changes - North America delivered EBIT adjusted of $2.2 billion with margins of 6.1% [23] - The company led the industry in full-size pickups and SUVs, achieving its best year ever in crossovers [4] - GM Financial's full-year EBIT adjusted was $2.8 billion, within guidance, and paid dividends of $1.5 billion to GM [25] Market Data and Key Metrics Changes - In the U.S., GM achieved its highest full-year market share in a decade, marking the fourth consecutive year of market share growth [4] - New energy vehicle sales in China reached nearly 1 million units in 2025, representing over half of total sales in the region [25] - The company expects total U.S. SAAR to be in the low 16 million unit range for 2026 [27] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet while investing in growth, with plans to invest $10-$12 billion annually in 2026 and 2027 [16][26] - GM is committed to EVs, with a portfolio that brought almost 100,000 new customers in 2025, and plans to reduce costs while enhancing profitability [8][10] - The company aims to achieve 8%-10% EBIT adjusted margins in North America by 2026, supported by improved EV profitability and warranty expense management [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic macro and regulatory landscape, positioning GM for sustained success beyond 2026 [32] - The company anticipates a benefit of $1 billion-$1.5 billion related to right-sizing EV capacity and expects to maintain pricing discipline despite competitive pressures [27][30] - Management highlighted the importance of adapting to changes in consumer demand and regulatory environments, particularly in the EV market [6][39] Other Important Information - The company incurred $3.1 billion in gross tariff costs for 2025, which was below the predicted range, and expects similar costs in 2026 [20][26] - GM Financial received approval for its industrial bank application, which will provide a new source of stable funding [25][43] - The company plans to increase its quarterly dividend rate by 20% and has authorized a new share repurchase program of $6 billion [9][18] Q&A Session Summary Question: Pricing Assumptions - Management indicated that they are not modeling any significant price increases for 2026, focusing instead on the annualization of previous pricing strategies [34] Question: Product Portfolio Dynamics - Management believes they have the right portfolio to adapt to market changes, including a strong internal combustion engine lineup and plans for hybrid vehicles [36][38] Question: Inventory Discipline - Management confirmed that inventory discipline will continue, contributing to stronger cash generation, with no significant buildup anticipated [41] Question: Industrial Bank Approval - The approval of the industrial bank is expected to lower the cost of funds, providing a complementary funding source for GM Financial [43] Question: EV Volume Declines - Management acknowledged uncertainty in EV demand but is looking to maximize internal combustion engine production to offset potential declines [60] Question: Tariff Mitigation Strategies - Management discussed ongoing efforts to mitigate tariff impacts through go-to-market strategies and fixed cost reductions, expecting net tariffs to be lower in 2026 [50][51]

Financial Data and Key Metrics Changes - Total company EBIT-adjusted was $3.4 billion, down $700 million year over year, impacted by a gross tariff of $1.1 billion [17][18] - Adjusted automotive free cash flow was $4.2 billion, aided by $300 million in cash tariff offset reimbursements [18] - North America delivered Q3 EBIT-adjusted margins of 6.2%, with record crossover deliveries and strong performance of full-size pickups and SUVs [18][19] Business Line Data and Key Metrics Changes - EV sales reached record levels in Q3 with 67,000 deliveries, capturing a 16.5% share of the U.S. EV market [19] - Warranty expense was a $900 million headwind year over year, indicating a need for improvement [20] - GM Financial posted Q3 EBIT-adjusted of $800 million, continuing to deliver value for customers and dealers [21] Market Data and Key Metrics Changes - In China, market share grew 30 basis points year over year to 6.8%, with equity income rising to $80 million [21] - GM's U.S. market share reached 17%, up 50 basis points year over year, with incentives remaining below the industry average for the 10th consecutive quarter [16][18] Company Strategy and Development Direction - The company is focused on returning North America to historical EBIT margins of 8% to 10% by improving EV profitability and managing fixed costs [12][25] - GM is investing in new battery chemistries and expanding U.S. production capacity, including a $4 billion investment to onshore production [7][11] - The company is transitioning from EV to ICE production in certain plants due to lower-than-expected EV adoption [9][10] Management's Comments on Operating Environment and Future Outlook - Management raised full-year guidance based on strong performance and ongoing disciplined execution [5][22] - The company expects EV demand to soften in the near term but remains committed to building to consumer demand [19][50] - Management is optimistic about 2026 being better than 2025, assuming a stable macro environment [22][66] Other Important Information - The company recorded a $1.6 billion special item charge in Q3, primarily related to the transition of Orion Assembly and reductions in battery module assembly capacity [9][10] - GM's deferred revenue from software services was up 14% from Q2 to almost $5 billion, indicating growth in software and services [12][13] Q&A Session Summary Question: Can you dive into some of the updated tariff disclosure? - The President's announcement expanded the MSRP tariff offset, allowing for more eligible parts, which contributes to tariff savings [29] Question: What are the preliminary high-level industry or macro factors for 2026? - It is too early to speculate on 2026, but there are tools to lower costs and drive better performance [32] Question: How will shifting emissions regulations affect ICE vehicle sales? - There is potential for increased sales of ICE vehicles due to unmet demand and supply constraints [38] Question: Can you unpack the tariff mitigation benefits? - The company expects to maintain pricing discipline and has seen benefits from go-to-market and footprint changes [46] Question: What is the outlook for EV profitability? - The company is focused on improving EV profitability through cost reductions and maintaining discipline in production [51] Question: How does GM view the competition from Chinese OEMs? - GM is focused on producing well-designed vehicles with the right technology and aims to compete effectively [82] Question: What milestones can be expected for 2026 on the autonomy journey? - The company is committed to personal autonomy and level four capabilities, with ongoing improvements in Super Cruise [85]

Financial Data and Key Metrics Changes - Total company EBIT adjusted was $3.4 billion, down $700 million year over year [21] - Adjusted automotive free cash flow was $4.2 billion, aided by $300 million in cash tariff offset reimbursements [23] - North America delivered Q3 EBIT adjusted margins of 6.2%, with record crossover deliveries and strong performance of full-size pickups and SUVs [23] Business Line Data and Key Metrics Changes - EV sales reached record levels in Q3 with 67,000 deliveries, solidifying GM's number two position in the U.S. EV market with a 16.5% share [24] - Warranty expense was a $900 million headwind year over year, indicating a need for improvement [25] - GM Financial posted Q3 EBT adjusted of $800 million, continuing to deliver value for customers and dealers [29] Market Data and Key Metrics Changes - In the U.S., GM achieved its highest third-quarter market share since 2017, with a 17% share, up 50 basis points year over year [19] - GM China market share grew 30 basis points year over year to 6.8%, with equity income rising for four consecutive quarters to $80 million [27] Company Strategy and Development Direction - The company is focused on returning North America to historical EBIT margins of 8% to 10% by improving EV profitability, managing fixed costs, and reducing tariff exposure [14][34] - GM plans to maintain capital discipline while investing in new technologies and expanding U.S. manufacturing capacity [8][33] - The company is transitioning from EV to internal combustion engine (ICE) production in certain areas due to changing regulatory environments [10] Management's Comments on Operating Environment and Future Outlook - Management raised full-year guidance based on strong performance and ongoing disciplined execution [6][30] - The company expects EV demand to soften in the near term but remains committed to improving EV profitability through cost reductions and efficiency [24][62] - Management expressed confidence in the resilience of the consumer and the strength of GM's financial position despite potential economic downturns [91] Other Important Information - GM recorded a $1.6 billion special item charge in Q3, primarily related to non-cash impairments and supplier contract cancellations [10] - The company is investing $4 billion in capital projects to onshore production and has plans to produce over 2 million vehicles per year in the U.S. [7][8] Q&A Session Summary Question: Can you dive into some of the updated tariff disclosures? - The President's announcement included the expansion of the MSRP offset, which broadens the scope of parts eligibility, leading to savings on tariffs [39] Question: What are the expectations for demand into 2026? - It is too early to speculate, but there are tools available to lower costs and drive better performance [42] Question: How will shifting emissions regulations affect ICE vehicle sales? - There is potential for increased sales of full-size pickups and SUVs due to unmet demand and supply constraints [48] Question: What is the outlook for EV profitability? - The company is focused on improving EV profitability through cost reductions and maintaining discipline in production and incentives [64] Question: How does GM view the consumer auto loan performance? - The consumer remains resilient, with credit performance as expected, and the company is well-positioned to weather potential economic downturns [91]

Financial Data and Key Metrics Changes - Total company EBIT adjusted was $3.4 billion, down $700 million year over year, impacted by a gross tariff of $1.1 billion [18][19] - Adjusted automotive free cash flow was $4.2 billion, aided by $300 million in cash tariff offset reimbursements [20] - North America delivered Q3 EBIT adjusted margins of 6.2%, with margins around 9% excluding tariffs [20] Business Line Data and Key Metrics Changes - EV sales reached record levels in Q3 with 67,000 deliveries, securing a 16.5% share in the U.S. EV market [21] - The company plans to produce over 2 million vehicles per year in the U.S. following significant investments [7] - Warranty expense was a $900 million headwind year over year, indicating a need for improvement [22] Market Data and Key Metrics Changes - GM achieved its highest third quarter market share in the U.S. since 2017, with a 17% share, up 50 basis points year over year [16] - GM China market share grew 30 basis points year over year to 6.8%, with equity income rising for four consecutive quarters to $80 million [24] Company Strategy and Development Direction - The company is focused on maintaining capital discipline while increasing domestic sourcing and manufacturing [6] - GM is transitioning from EV to ICE production in certain plants to address overcapacity and improve profitability [9][11] - The company aims to return North America to historical EBIT margins of 8% to 10% through various initiatives [12][30] Management's Comments on Operating Environment and Future Outlook - Management expects EV demand to soften significantly in the near term but remains committed to improving EV profitability [22][66] - The company anticipates robust double-digit revenue growth through the end of the decade with gross margins of about 70% [14] - Management is optimistic about the future, expecting 2026 to be even better than 2025, driven by various operational improvements [29][30] Other Important Information - The company has invested $4 billion in capital investments to onshore production and plans to build a new generation of advanced fuel-efficient engines [6][7] - GM Financial posted a Q3 EBT adjusted of $800 million, continuing to deliver value for customers and dealers [24] Q&A Session Summary Question: Can you dive into some of the updated tariff disclosure? - The President's announcement expanded the MSRP offset and eligibility for parts, leading to savings on tariffs [34][35] Question: What are the preliminary high-level industry or macro factors for 2026? - It is too early to speculate, but the company has tools to lower costs and drive better performance [38] Question: How do shifting emissions regulations affect ICE full-size pickups and SUVs? - The company anticipates being able to sell ICE vehicles longer due to changing regulations, with demand exceeding supply constraints [46][47] Question: What is the outlook for EV profitability? - The company sees EVs as a priority and is focused on improving costs and maintaining discipline in production and incentives [66][67] Question: What is the current status of the GM Financial portfolio? - The portfolio is performing well, with a resilient consumer base and flat charge-offs year over year [94] Question: What are the expectations for EBIT in 2026? - While specific guidance for 2026 has not been provided, the company expects it to be better than 2025, assuming a similar macro backdrop [97]