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4w ago

GM and Tesla Post Sharp Q2 Earnings Declines as Tariffs Bite and EV Incentives End

Detroit’s GM is investing in U.S. plants to counter recent tariff costs, with Tesla starting low-volume runs of a budget EV before tax credits vanish.

FILE PHOTO: BYD Dolphin Surf electric cars at a vehicle presentation event in Berlin, Germany May 21, 2025. REUTERS/Annegret Hilse/File Photo
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Overview

  • GM’s net income plunged 35% in Q2, with a $1.1 billion tariff impact and a warning of up to $5 billion in further costs this year.
  • GM is allocating $4 billion to expand domestic assembly capacity, aiming to mitigate roughly 30% of its tariff burden and boost U.S. output.
  • Tesla’s Q2 revenue fell 12% to $22.5 billion and profit dropped 16% to $1.2 billion, marking its steepest sales decline in over a decade.
  • Tesla delivered 384,122 vehicles in the quarter—a 13.5% year-over-year drop—and began building first units of its lower-cost model ahead of full-scale production in H2.
  • Both automakers face the September expiry of the $7,500 federal EV tax credit and rising import tariffs, prompting warnings of rough quarters before longer-term growth strategies take hold.