General Motors’ earnings have exceeded Wall Street’s forecasts, but investors are still dumping the stock broadly on fears of tariffs that will make it hard for the carmaker to hit its 2025 targets.

Shares dropped more than 10 percent on Tuesday, putting it on track for its worst day since the early days of the COVID-19 pandemic in March 2020. Investors and analysts said GM’s outlook is clouded by United States President Donald Trump’s threats of tariffs and reduced support for electric vehicles.

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Trump on Monday evening again threatened tariffs on a broad array of goods, including steel, aluminium and copper, all materials critical to building automobiles. He has also threatened heavy levies on allies Mexico and Canada, which are key to the US automotive supply chain.

The automaker projected net income of $11.2bn to $12.5bn for 2025. That’s ahead of expectations for $10.8bn, and numerous analysts termed that outlook optimistic.

“There’s just a lot of uncertainty between tariffs as well as the rules and regulations around EVs and tax incentives. With that uncertainty, that really isn’t baked into GM’s guidance at this point,” said Jeff Windau, financial analyst at Edward Jones.

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GM CEO Mary Barra told investors on a conference call Tuesday that she believes Trump “wants to use policy and regulations in ways that will strengthen not harm domestic manufacturers like GM”. Trump has said he wants to use tariffs to push companies to move operations back to the US – but such moves can take years.

In the meantime, GM has an “extensive playbook” pulled together in the event tariffs are imposed, GM’s CFO Paul Jacobson told reporters on Monday prior to Trump’s statements. The company had already started to bring vehicles in its international inventory in Mexico and Canada to the US, Jacobson said.

“Every delivery that we can make before a tariff is instituted, it’s that much better, rather than sitting on inventory,” he said.

He did say, however, that they would not be able to make some decisions until they understand what the tariff environment will look like. “There’s things that we can do to balance plants, etc, and then there are things that cost a lot more money going forward,” he said.

EV losses

GM’s fourth-quarter revenue of $47.7bn surpassed analyst expectations of $43.9bn. Adjusted earnings per share of $1.92 also exceeded analyst forecasts of $1.89 per share.

It earlier had said it sold 2.7 million vehicles for the year, up 4 percent from 2023.

GM sold vehicles at an average price of $50,000 in 2024, and executives see a 1 percent to 1.5 percent drop in North American pricing power and a modest decline in gas-powered vehicle volume in 2025.

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The company expects losses will narrow with its battery-powered vehicles, reorganisation of its China business, and the end of robotaxi development at Cruise, its autonomous vehicle unit.

The Detroit carmaker does not break down its EV losses, but said in 2024 that revenue was higher than fixed costs including labour and material costs, a metric that it calls positive variable profitability. The figure does not include costs such as building assembly lines, but indicates financial progress in the EV rollout.

GM did not meet its goal of producing and wholesaling 200,000 EVs in North America in the year, instead ending up at 189,000 units wholesale, Jacobson said. EV inventory fell from 100 days at the end of the third quarter to 70 days.

GM previously had forecast EV operating losses would narrow by between $2bn and $4bn this year from undisclosed levels, although Jacobson said the decline in losses was likely to be closer to $2bn.

GM reported pre-tax profit of $2.5bn in the quarter but reported a $3bn net loss, mostly because of $4bn in restructuring charges in China where it lost $4.4bn in the year. The China business did return to profitability before restructuring charges in the fourth quarter, Jacobson said.