Warning lights flashed early in General Motors' internal reports. Margins began to shrink, costs to rise, and enthusiasm for certain markets quickly cooled.

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When the annual results were finally consolidated, the figure confirmed what many analysts already suspected: 2025 was not a good year for the American automotive giant.

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The company closed the year with a 55% reduction in profits compared to 2024, a considerable setback even for an industry accustomed to economic cycles. Although the company avoided losses in the annual balance sheet, the financial impact marked a turning point in its global strategy and its commitment to accelerated electrification.

According to the financial report, General Motors obtained an annual net profit of $2.7 billion, well below the previous year's figure. In operational terms, adjusted EBIT reached $12.7 billion, a seemingly solid figure, but insufficient to offset extraordinary expenses and the slowdown in several key markets.

The Hidden Cost of Overly Rapid Expansion

One of the factors that most significantly contributed to the deterioration in results was the forced revision of the electric vehicle strategy. The elimination of tax incentives in the United States considerably reduced the appeal of these models to consumers, just as GM had increased its investment and production capacity in this segment.

Lower demand led to emergency adjustments that were directly reflected in the balance sheet. The company recorded outflows of approximately $7 billion in special charges, primarily associated with the restructuring of operations in China and changes in production at North American plants.

This scenario was compounded by the tariffs imposed by the Donald Trump administration on imported parts and vehicles. General Motors relies heavily on components manufactured in China, Mexico, and Canada, which increased its cost structure and forced it to modify supply chains while in operation.

The impact became especially visible in the last part of the year. During the fourth quarter of 2025, the company reported a net loss of $3.3 billion, a clear sign that adjustments could no longer be postponed.

Industrial Relocations and New Investments

As part of its cost-cutting plan, General Motors decided to relocate some of its production to the United States. One of the most significant moves will be the local production of the next-generation Buick Envision, currently manufactured in China. The change is scheduled to begin in 2028 and aims to reduce logistics and tariff costs in the medium term.

This industrial redesign is not without cost.

The company allocated approximately $4 billion to modernize three plants focused on producing vehicles with internal combustion engines, a sign that GM is moderating its complete transition to electrification. In parallel, the company also reviewed its portfolio of electrical products. The return of the Chevrolet Bolt surprised the market, but its production will be limited, and the model will disappear again in 2027, when the brand concentrates its efforts on a new generation of the electric Equinox. The future of fully electric vehicles in the United States, at least within the group, remains under evaluation.

North America, the lifeline

Despite the complex landscape, General Motors' management maintains an optimistic outlook for 2026. The focus will be on its most profitable market: North America, especially in the pickup truck and full-size SUV segment under the Chevrolet and GMC brands.

The company projects achieving a profit margin of between 8% and 10% in the region next year, supported by the launch of new models and updates with both traditional and hybrid engines systems.

If the plan is fulfilled, GM expects to close 2026 with net income between $10.3 billion and $11.7 billion, in addition to adjusted earnings that could range between $13 billion and $15 billion.