General Motors (GM) reported Q2 earnings that exceeded expectations, with revenue rising to $48.03 billion compared to $46.61 billion anticipated. Adjusted earnings per share (EPS) were $3.57, surpassing the $3.19 estimate. Despite fewer sales, GM raised its full-year guidance, projecting adjusted EBIT between $14.0 and $16.0 billion, and adjusted EPS of $12.00 to $14.00. Key factors include improved customer demand, decreasing tariff costs, and operational efficiencies. However, GM's vehicle sales dropped by 4.2%, attributed to discontinued models and reduced demand for EVs following the expiration of federal tax credits. Notably, truck and SUV sales helped mitigate sales declines, with average transaction prices for vehicles exceeding $52,400.

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GM boosts full-year guidance, reports Q2 earnings beat as costs come down

Pras Subramanian· Senior Reporter

Updated Tue, July 21, 2026 at 6:37 AM EDT3 min read

GM ( GM) reported second quarter results before the bell on Tuesday that topped expectations, with the Big Three stalwart continuing to grow profits despite fewer sales.

GM reported Q2 revenue of $48.03 vs. $46.61 billion, per Bloomberg consensus, up 1.9% from the $47.1 billion the automaker posted a year ago. GM posted adjusted earnings per share (EPS) of $3.57 vs. $3.19 estimated, and adjusted EBIT of $3.94 billion compared to $3.7 billion expected.

For comparison, GM's adjusted EBIT in Q2 last year came in at $3 billion — a figure heavily weighed down by tariff costs that are now easing, as tariff offsets take hold.

And for a second time this year, GM raised its guidance. For the full year, now GM expects:

Adjusted EBIT of $14.0 billion - $16.0 billion (prior $13.5 billion - $15.5 billion)
Adjusted EPS of $12.00 - $14.00 (prior $11.50 - $13.50)
Adjusted automotive free cash flow of $9.5 billion - $11.5 billion (prior $9 billion - $11 billion)

GM said its updated guidance made key assumptions, including pricing up around 0.5%, EV losses improving by $1.0 to 1.5 billion, regulatory benefits of $500 to $700 million, gross tariff costs of $2.5 to $3.5 billion, and commodity inflation (including DRAM) of $1.5 to $2.0 billion, among others.

"Customer demand in North America remains strong driven by our very attractive lineup of pickups and SUVs," CEO Mary Barra added in her letter to shareholders. "Our 8.6% EBIT-adjusted margin in North America was up 2.5 points from a year ago, and we continue to lower our warranty costs, reduce EV losses, and increase operating efficiency. "

GM said incentives as a percentage of MSRP averaged 4.7% in Q2, below the industry average of 6.3%, with dealer inventory down 3% year over year, in the company's targeted range of 50 to 60 days.

In addition to government offsets that are reducing its tariff bill, GM has spent the past year reworking its supply chain, shifting production, and negotiating with suppliers to blunt the tariff hit.

But while tariffs easing will help its bottom line, its vehicle sales have been slipping.

GM sold approximately 715,000 vehicles in the US in the second quarter, a 4.2% decline from a year ago, though it held its position as the country's top-selling automaker.

The GMC Sierra is displayed at the 2026 Canadian International AutoShow in Toronto, Ontario, on Feb. 12, 2026. (Arrush Chopra/NurPhoto via Getty Images)·NurPhoto via Getty Images

The company said much of the drop was due to discontinued models like the Cadillac XT4 and XT6 and the Chevrolet Malibu, as well as a sharp EV pullback following the expiration of the federal EV tax credit, which pulled demand forward into late 2025.

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GM said it paid out $4.5 billion in EV-related charges though Q2, with total outlay including non-cash charges hitting $7.2 billion thus far this year.

Chevy Equinox EV sales fell 61.8%, the Blazer EV dropped 68.1%, and the GMC Hummer EV slid 56.8%. GM still gained EV market share, holding the No. 2 spot behind Tesla ( TSLA) at an estimated 13.5% to 14%.

GM's trucks and big SUVs helped soften the blow. GMC Sierra sales rose 5% to 95,147, a record quarter for the pickup, with overall light-duty pickup sales up 4%.

GM said it's on pace to lead the full-size pickup segment for a seventh consecutive year with a share near 42%. Crossovers also helped, with the Chevy Traverse up 19.5% and the Trailblazer up 28.4%.

Crucially for margins, GM said it did all of this without much discounting. Average transaction prices topped $52,400 in the quarter.

But vehicle affordability remains a problem in the US, with elevated rates and record-high transaction prices hitting buyers. Tighter inventories have already dented full-size SUV sales, with the Tahoe down 8.1% and the Suburban off 20.4%.

Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram .

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