GM(US:GM)2025-10-21 13:32Financial 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]