TRADE tariffs have been blamed for General Motors’ 35 per cent slump in second-quarter net income, with GM saying the tariffs will reduce profits by up to $US5 billion ($A7.6b) this year.

GM spelled out the plunge by saying the tariffs – only introduced by President Trump in April – had led to a $1.1 billion ($A1.68b) hit in the second quarter.  Profits for Q2 plunged 45 per cent at $US2.1b ($A3.2b) compared with $US3.9b ($A5.94b) in 2024.

Net income was down by over a third compared with the same period in 2024 at $US1.9b ($A2.9b), despite higher global unit sales of 1.54 million units, up 110,000 units on 2024’s 1.43m second-quarter sales.

The car-maker this week reported quarterly revenues at $US47.1b ($A71.75b) compared with $US48b ($A73b) in the same quarter last year. Adjusted EBIT was down to $US3b ($A4.57b) from $US4.4b ($A6.7b) in Q2 last year and the adjusted EBIT margin was down to 6.4 per cent from 9.3 per cent last year.

GM said it still expects tariffs to reduce profits by $4 billion ($A6.1b) to $5 billion ($A7.62b) this year.

GM CEO Mary Barra said: “I believe everything we’re doing strategically and proactively, along with closer alignment of emissions rules with consumer demand, will further differentiate us from our competitors, increase our resilience, and help us emerge from this transition period even stronger and more profitable than before.”

She added that GM was “positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape.”

The optimism comes from the $US4b ($A6.1b) of new investment in GM’s US assembly plants to add 300,000 units of capacity for high margin light-duty pickups, full-size SUVs and crossovers.

“The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the US each year as we scale,” she said.

GM left its 2025 guidance unchanged and said the 2025 gross tariff impact is unchanged at $US4b-$US5b ($A6.1b-$A7.62b). However, it also said it is “making solid progress to mitigate at least 30 per cent of this impact through manufacturing adjustments, targeted cost initiatives, and consistent pricing.”

Meanwhile, Stellantis says its sales in the quarter ended June 30, 2025 were hit by lower shipments in North America caused by the impact of import tariffs imposed by the US.

Consolidated shipments for the three months ending June 30, 2025 were an estimated 1.4 million units, representing a 6 per cent decline year-on-year, reflecting North American tariff-related production pauses early in the quarter, Stellantis said.

GM CEO Mary Barra

In North America, Q2 shipments declined approximately 109,000 units compared to the same period in 2024, representing a 25 per cent decline, due to factors including the reduced manufacture and shipments of imported vehicles, most impacted by tariffs, and lower fleet channel sales.

In a preliminary report, Stellantis also projected a first half loss of €2.3 billion ($A4.1b), but said that the second half of the year would see some uplift to profitability due to the arrival of new products at dealerships.

European Q2 sales were down 6 per cent versus the same quarter of last year, due “primarily to product transition factors”, the company said. 

Stellantis also said the recently-launched “Smart Car” platform B-segment vehicles “continue to ramp up to their full production levels, and prior year comparisons are affected by the hiatus of Fiat 500 ICE pending the arrival of its mild-hybrid successor”. 

Shipments of the four Smart Cars (Citroën C3 and C3 Aircross, Opel/Vauxhall Frontera and Fiat Grande Panda) increased 45 per cent sequentially in the Q2 2025 period, or 25,000 units, compared to the Q1 2025 period, the company said.