GM Shares Rally On Strong 2026 Outlook, $6B Share Buyback Program Despite Tariff And EV Demand Woes

• In 2026, the company anticipates gross tariff costs in the $3-$4 billion range, slightly higher than 2025.
• The company is looking to mitigate tariff impact by onshoring production for its profitable trucks and SUVs.
• CEO Mary Barra said the company continues to believe in EVs despite dwindling demand.

Shares of General Motors (GM) rallied 9% on Tuesday after the automaker raised its profit outlook for 2026 despite tariff headwinds and slowing demand for electric vehicles.

The company now expects full year adjusted and diluted earnings per share of $11 - $13, above the $10.60 reported in FY25, and exceeding an analyst estimate of $11.83 at the midpoint, according to data from Fiscal AI.

The company expects annual adjusted core profit of $13 billion to $15 billion, above the $12.7 billion recorded in FY25.

Tariff Impact

In 2025, the automaker incurred $3.1 billion in tariff costs, below its predicted range of $3.5-$4.5 billion.

CFO Paul Jacobson said that the company was able to offset more than 40% of gross tariff costs through a combination of footprint adjustments and cost reduction initiatives.

In 2026, the company now anticipates gross tariff costs in the $3-$4 billion range, slightly higher than 2025. In Q1 2026 alone, the gross tariff impact is expected to be in the $750 million-$1 billion range.

The company is also looking to mitigate tariff impact by onshoring production. It said that it is looking to invest $10-$12 billion annually in 2026 and 2027, including approximately $5 billion to expand U.S. manufacturing capacity for some of the highest-demand vehicles.

“We expect headwinds in the range of $1-$1.5 billion associated with the onshoring of vehicle production to the U.S., investments to enhance supply chain resiliency, and investments to support our software initiatives,” Jacobson said about 2026 while adding that the investments are expected to increase capacity for the company’s highly-profitable full-size pickups and SUVs.

The company also expects incremental headwinds in the range of $1-$1.5 billion, driven primarily by recent trends in aluminum, copper, and other key commodities, in addition to unfavorable foreign exchange movements.

Earnings Update

For the fourth quarter of 2025, GM reported revenue of $45.29 billion, marking a dip of 5.1% year-on-year.

Adjusted and diluted earnings came in at $2.51 per share, above a Wall Street estimate of $2.26.

The company’s financials in the quarter was impacted by more than $7.2 billion in special charges driven primarily by a realignment of EV capacity and investments to adjust to expected declines in consumer demand for EVs, the company said.

The automaker is now combating slowing demand for EVs, spurred by the removal of federal tax credit of $7,500 on the purchase of EVs in the U.S. 
 

CEO Mary Barra, however, said that the company continues to believe in EVs.

“We know EV drivers don't often go back to ICE, so we'll continue executing our plan to dramatically reduce costs and to be well-positioned for the future. This will require continued investment, but at much lower levels, and I'm confident in our path to profitability,” Barra said.

The company also announced on Tuesday that its board has approved a new $6.0 billion share buyback initiative.

“For several years now, GM’s strong brands and winning vehicles, as well as our technology-driven services and operating discipline, have delivered consistently strong cash generation,” Barra said. “We believe that formula is sustainable, which is why we’re increasing our dividend and planning future share repurchases.”

The automaker increased its quarterly dividend payout by $0.03 per share to $0.18 per share, marking an increase of 20%.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around GM stock rose from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.

GM stock has gained 58% over the past 12 months. 

Also See: Tesla’s Brand Value Tanked In 2025 — Consulting Firm Thinks Musk’s Politics Could Have Played A Role

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