General Motors Q1 Earnings Call Highlights

Key Points

• GM reported an "outstanding" Q1 with North America EBIT‑adjusted margin of 10.1% (nets to 8.6% after a 1.5‑point tariff accounting benefit) and Q1 EBIT‑adjusted of $4.3B, and raised 2026 guidance to EBIT‑adjusted $13.5–$15.5B and adjusted EPS $11.50–$13.50, while warning that the war in Iran, higher commodity inflation (now $1.5–$2.0B) and tariffs (gross $2.5–$3.5B expected) will increase costs.
• GM is making progress on EVs and software: U.S. EV share climbed to 13% and EV losses narrowed despite additional restructuring/EV charges (about $1.1B in Q1 and roughly $5.6B in cash charges since H2 2025), while OnStar and digital services drove >$750M in Q1 revenue with full‑year digital revenue expected at $3.1B and subscribers trending toward 13 million.

General Motors NYSE: GM executives highlighted strong first-quarter 2026 profitability, improving EV economics, and fast-growing digital services revenue, while also pointing to higher costs tied to the war in Iran and a still-uncertain demand backdrop.

First-quarter results and North America margins

Chair and CEO Mary Barra said the company delivered “an outstanding quarter” supported by a “strategic product portfolio and great execution” across GM’s team, dealers, and suppliers. She reiterated GM’s plan to return to 8% to 10% EBIT-adjusted margins in North America for the full year.

In the first quarter, GM North America posted an EBIT-adjusted margin of 10.1%, which included 1.5 points of benefit tied to an accounting adjustment stemming from a recent Supreme Court tariff decision. Barra said that benefit “nets to an 8.6% margin.”

EV share also improved during the period. Barra said GM was “number two in EVs,” and that as the company exited the quarter its U.S. EV market share was 13%, up from about 10% in December 2025.

CFO Paul Jacobson said GM delivered Q1 EBIT adjusted of $4.3 billion, “surpassing expectations even after excluding the $0.5 billion tariff adjustment.” He added that the company remained disciplined on pricing and inventory, noting U.S. incentive spending as a percentage of MSRP was “more than two points below the industry average.”

Inventory tightness, pickups, and product mix

Management repeatedly pointed to lean inventory levels in North America as a factor limiting retail performance, especially for trucks. Barra said GM entered the year with “lean inventory in the U.S.” and had planned downtime in North America during the quarter to install tooling for next-generation full-size pickups.

Despite the tight supply, Barra said GM continued to lead the industry in the U.S. and Canada and remained “number two in Mexico.” She also said GM held 42% of the U.S. full-size pickup market.

Jacobson said U.S. dealer inventory ended the quarter at 516,000 units, down 6% year-over-year, and down 9% for full-size pickups. He said lean inventory constrained retail sales, but GM expects to raise inventory levels of key products over the next several quarters while staying mindful of demand.

On the pickup changeover, Jacobson said much of the significant downtime in the quarter—particularly related to heavy-duty trucks—“is behind us,” and GM is not anticipating material downtime going forward. In a later exchange, Barra said the ramp for the changeover “will start in the third quarter” and “accelerate,” though there could be “a small amount of impact” later in the year given how lean the company is running.

Barra also highlighted crossover growth as a differentiator, saying crossovers have increased from just over 40% of sales to more than 46% since the lineup refresh began in 2023, and that vehicles including the Chevrolet Trax and Equinox, Buick Envista, and GMC Terrain have helped GM gain share.

Tariffs, Iran-related costs, and updated guidance

GM raised its 2026 outlook, with Barra saying guidance was updated to reflect the tariff accounting adjustment. Jacobson said management is assuming SAAR remains in the low 16 million unit range.

• EBIT-adjusted guidance: raised to $13.5 billion to $15.5 billion from $13.0 billion to $15.0 billion
• Diluted EPS adjusted: raised to $11.50 to $13.50 from $11.00 to $13.00
• Adjusted automotive free cash flow: maintained at $9 billion to $11 billion, weighted to the second half; excludes the tariff refund due to timing uncertainty

Barra cautioned that “the war in Iran has raised our costs and its duration remains uncertain,” and said GM is working to offset pressures by reducing spending in other areas and finding efficiencies. In Q&A, she said the company is watching how the conflict affects oil prices, logistics and supply chain costs, and whether it could eventually shift consumer mix—though she said GM has not seen such a shift to date.

Jacobson said GM incurred $200 million of incremental gross tariff costs in the first quarter versus minimal tariff costs last year, and emphasized that most of GM’s tariff burden comes from Section 232 rather than the IEPA tariffs affected by the Supreme Court decision. He described the Q1 accounting treatment as crediting a receivable for IEPA tariffs paid last year, while noting the company did not change free cash flow guidance because the refund timing is uncertain.

Looking to the rest of 2026, Jacobson raised the company’s expectation for commodity inflation (including logistics and higher DRAM costs) to $1.5 billion to $2.0 billion, an increase of $500 million that he said would be “more or less equally weighted” across the remaining quarters. He also said gross tariff costs are now expected to be $2.5 billion to $3.5 billion for the year, down from prior guidance of $3.0 billion to $4.0 billion due to the tariff adjustment recorded in Q1.

EV restructuring charges and profitability progress

Jacobson said revenue declined about $400 million year-over-year in the quarter, “as expected,” primarily due to lower EV wholesale volumes. He added that EV losses declined by “several $100 million” year-over-year, driven by lower volumes, manufacturing efficiencies, and lower fixed costs.

He also provided an update on EV-related charges associated with prior capacity and footprint decisions. GM recorded $7.6 billion of EV-related charges in the second half of 2025, which Jacobson broke into $4.6 billion estimated cash charges and $3.0 billion non-cash impairments. In Q1 2026, GM took an additional $1.1 billion in EV charges, “driven mainly by contract cancellations and supplier commercial claims,” and expects about $1.0 billion of that to have a future cash impact.

Jacobson said GM has recorded around 90% of expected total supplier commercial claim costs and anticipates reaching agreements in principle on most of the remainder during the second quarter. Of the total $5.6 billion in EV-related cash charges recorded since the second half of 2025, he said $2.6 billion had been paid as of March 31, with another $600 million paid in April, and the company expects most remaining cash flows to occur in 2026.

Digital services momentum: OnStar, Super Cruise, and SDV 2.0

Executives repeatedly pointed to software and services as a growing, margin-accretive component of results. Barra said GM is on pace to add more than 1 million OnStar subscribers in 2026, with about 30% of existing customers choosing a premium plan. She said customers have driven 1 billion hands-free miles using Super Cruise, and GM is on pace to exceed 850,000 Super Cruise subscribers by year-end, with renewal trends “in the 30%-40% range.”

Jacobson said OnStar and digital services produced over $750 million of recognized revenue in Q1, up more than 20% year-over-year. For the full year, GM expects $3.1 billion of recognized revenue, up 15% year-over-year. He also said GM expects to reach 13 million subscribers by the end of 2026, with monthly ARPU around $20, and projected deferred revenue to approach $7.5 billion by year-end, up more than 35% year-over-year.

In Q&A, Jacobson said GM’s focus is on attachment rates and customer value, and that SDV 2.0 will expand the number of digital opportunities. He also described Super Cruise subscription dynamics, saying GM is “continuing to trend at about that 40% attachment rate after the subscription period,” and explained that hardware costs are expensed when vehicles are sold while revenue is deferred over the trial period, helping margins as deferred revenue amortizes into results over time.

Barra said Super Cruise expansion is driven by mapping and a focus on highways and major roads, emphasizing GM’s focus on safety and building customer trust as the company works toward “eyes-off, hands-off” technology targeted for 2028 on the Cadillac Escalade IQ.

About General Motors NYSE: GM

General Motors Company NYSE: GM is a global automotive manufacturer headquartered in Detroit, Michigan, that designs, builds and sells cars, trucks, crossovers and electric vehicles, and provides related parts and services. Founded in 1908, GM has long been one of the world's largest automakers and has evolved into a multi-brand company whose primary marques include Chevrolet, GMC, Cadillac and Buick. Beyond vehicle manufacturing, GM's operations encompass vehicle financing, connected services and advanced mobility initiatives.

GM develops and markets a broad portfolio of products and technologies, including internal-combustion and battery-electric vehicles, vehicle components and on-board connectivity services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.