General Motors Company
Analysis
GM has paid for its EV overreach and is now a truck-and-software cash machine: margins are back at target and buybacks have cut the share count by more than a third. Whether 2027 beats 2026 rests on the new pickups launching cleanly before cost inflation eats the gain. How much of 2027's profit growth comes from the new pickups?
- The margin repair is done; growth now comes from trucks and software.
Two straight quarters inside the 8% to 10% North America target, with warranty about $1.1 billion better this year and EV losses cut by a similar amount. Profit no longer leans on an EV market that never showed up.
- OnStar and Super Cruise are now a recurring, high-margin second business.
Over $3 billion a year of revenue at roughly 70% margins, with $7.5 billion already booked in advance. Super Cruise goes standard on high-end Silverado and Sierra trims next year, so buyers keep paying long after the sale.
- Costs are climbing faster than the new trucks can arrive.
The commodity, freight and memory bill rose to roughly $2 billion this year, and annualizing recent prices would add about as much again in 2027. Management's promise that next year beats this one is conditional on that easing. What if commodity, freight and memory costs never ease?
- Truck franchise and pricing disciplineThe bull case is that GM's position in full-size trucks and SUVs lets it hold price with low incentives while rivals discount, so mix and profit per vehicle stay high.
- Software and connected servicesSoftware and connected services give GM revenue that is paid for in advance and does not depend on the next vehicle sale, and it carries much higher margins than building cars.
- Share count reductionRepurchases have shrunk the share count so much that per-share profit can keep growing even if total company profit only holds steady.
- Commodity and memory inflationThe bear case is that copper, steel, freight and memory costs are rising faster than the company can cut elsewhere, and the increases arrived too recently to offset.
- Truck launch timingBecause three truck plants and three engine plants are being changed over, the volume and profit payoff from the new trucks is pushed out rather than immediate.
- Tariff and trade policyTariffs and the rules for imported vehicles and parts remain a large cost set by policy, and the trade agreements behind those rates are still being renegotiated.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$1K | Aug 24 | Oct 8 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jul 24 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$15K | Jul 8 | Sep 22 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 23 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Mar 23 | May 13 |
Congressional trading data provided by QuiverQuant
How General Motors Company turned $185B of revenue into $2.9B of operating income.
| Revenue | ||
|---|---|---|
| GMNA | $154B | ▼ 2.03% YoY |
| GM Financial Segment | $17.1B | ▲ 7.46% YoY |
| GMI | $13.4B | ▼ 3.33% YoY |
| Cruise | $1.0M | ▼ 99.61% YoY |
| Total revenue | $185B | |
| Gross profit | $20.1B | 10.9% |
| Operating income | $2.9B | 1.6% |