GM bets its truck business can carry its China and EV losses through 2026

General Motors posted $48 billion in second-quarter revenue — a 1.9% increase from a year earlier — and delivered two contradictory data points at once. Net income attributable to stockholders fell to $1.3 billion, down 31.1% from the prior year. Adjusted earnings before interest and taxes came in at $3.9 billion, up nearly 30%, with an 8.2% margin on those adjusted figures. The company then raised its full-year adjusted EBIT guidance to between $14 billion and $16 billion, and its adjusted EPS target to $12 to $14.

The gap between those two numbers — $1.3 billion reported net income against $3.9 billion adjusted EBIT — is not a rounding error. It represents roughly $2.6 billion in charges, write-downs, and equity losses that GM strips out of the figure it asks Wall Street to focus on. The adjustments include ongoing losses from the Chinese joint ventures that once underpinned GM’s global growth story, the costs of winding down its Cruise autonomous vehicle unit after a safety incident ended its public-road ambitions, and restructuring charges tied to technology and product pivots that have not yet delivered returns. These are not one-time surprises — they are recurring absences from a ledger that GM’s adjusted metric conveniently skips.

What is actually working is North America. Truck and SUV pricing has held in the tariff environment, and GM posted that 8.2% adjusted margin on vehicles that American consumers are buying in volume. Full-size pickup trucks and large SUVs, manufactured primarily across US and Canadian facilities, have been insulated from the import cost pressures squeezing automakers that depend on cross-border supply chains. The company beat analyst estimates of $3.29 adjusted EPS, reporting $3.57 — a $0.28 beat attributed partly to improved warranty cost management and stronger North American pricing.

The skeptical read is harder to set aside than GM’s guidance raise would suggest. A company that consistently reports GAAP income at less than a third of its adjusted figure is either absorbing genuine one-time costs that will eventually clear, or quietly normalizing ongoing losses as non-recurring. The Cruise write-downs were supposed to represent a closed chapter. The China JV losses are structural — the result of a two-decade bet on Chinese middle-class growth that is now unwinding under pressure from domestic brands that took market share faster than most Western automakers anticipated. Investors chose to focus on the adjusted number and the raised guidance. That is trust extended on credit.

For the workers and suppliers tied to GM’s North American operations, the split registers differently. Strong adjusted profitability implies a company with the financial health to invest in plants, honor labor commitments, and expand production capacity. Falling GAAP income, if sustained, implies a company rationing capital across a business that has absorbed tens of billions in strategic losses over the past decade. The UAW contracts negotiated in 2023 locked in wage commitments that assumed meaningful net earnings capacity across multiple cycles.

The next test comes at GM’s third-quarter earnings in late October. Before then, the Federal Reserve’s July 29 rate decision will clarify the rate trajectory for the auto loan market — and whether the consumer demand that has kept truck and SUV pricing intact through the tariff era can hold into 2027.

Tags: automotive industry, tariffs, General Motors, GM, Q2 earnings