GM Stock Falls in 2025 Despite Strong Q2 Earnings and Raised Outlook – Cost-Cutting and EV Production Challenges Weigh In
General Motors delivers impressive Q2 2025 results and boosts full-year forecast, but investor concerns over escalating cost-cutting measures and EV battery production hurdles lead to a dip in shares.
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Highlights
- GM surpasses expectations with robust Q2 2024 earnings and raises annual guidance.
- Strong consumer demand for trucks and SUVs drives revenue growth.
- Company ramps up cost-cutting efforts and faces challenges in scaling new EV battery production.
In the second quarter of fiscal 2024, General Motors (GM) reported earnings per share (EPS) of $1.91, beating analyst predictions, alongside a 25.1% revenue increase to $44.75 billion. This strong performance prompted GM to raise its full-year adjusted profit forecast to a range of $12 billion to $14 billion, up from $11 billion to $13 billion earlier this year.
CEO Mary Barra attributed the positive results to robust customer demand, noting that GM’s vehicles have topped U.S. industry rankings in initial quality for two consecutive years. CFO Paul Jacobson highlighted that higher sales volumes of trucks and SUVs, combined with favorable pricing, contributed significantly to the company’s financial strength.
Despite these gains, GM announced plans to intensify its cost reduction efforts, increasing expected savings from $2 billion to $3 billion for the year. Additionally, Jacobson acknowledged difficulties in producing a new EV battery pack, which could impact production targets. GM aims to manufacture approximately 100,000 electric vehicles in the second half of 2024.
Following these updates, GM shares declined during the trading session but remain higher compared to the start of the year.
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