GM Tightens 2026 Profit Outlook, Raises Free Cash Flow Guidance

General Motors (GM) tightened its 2026 adjusted earnings outlook and raised its adjusted automotive free cash flow range after stronger North American operations helped third-quarter profit increase despite lower global deliveries. The automaker reported $4.1 billion of EBIT-adjusted and adjusted diluted earnings of $3.70 per share, up 32% year over year, while its North American adjusted margin rose 2.5 percentage points to 8.7%.

GM now expects full-year EBIT-adjusted of $14.5 billion to $15.5 billion, compared with its previous range of $14 billion to $16 billion. Its adjusted diluted EPS forecast narrowed to $12.75 to $13.75 from $12 to $14, while adjusted automotive free cash flow guidance increased to $11.5 billion to $12.5 billion from $9.5 billion to $11.5 billion.

North America drives stronger operating performance

Third-quarter revenue rose to $50 billion from $48.6 billion a year earlier. On a GAAP basis, operating income increased to $3.6 billion from $1.1 billion, while net income attributable to stockholders climbed to $3.3 billion from $1.3 billion. Diluted GAAP earnings were $3.73 per share, compared with $1.35 a year earlier.

Adjusted automotive free cash flow reached $5.9 billion, up from $4.2 billion and the highest quarterly level in four years. GM attributed the increase to higher automotive EBIT and the timing of tariff payments. Net automotive cash provided by operating activities was $8 billion, while capital expenditure totaled $2.3 billion.

The North American business benefited from improved warranty performance, favorable electric-vehicle inventory adjustments, higher wholesale volume and a stronger vehicle mix. Those gains were partly offset by higher commodity and logistics expenses, as well as manufacturing costs tied to bringing production to the U.S. and preparing the next generation of full-size pickups.

North American internal-combustion-engine wholesale volumes increased by 53,000 units, partially offset by a 23,000-unit decline in EV wholesales. Higher full-size pickup volumes and lower EV volumes also supported mix. Pricing was slightly softer because of incentives used to sell down current-generation full-size pickups, although GM said its incentive spending remained several hundred basis points below levels seen during previous truck changeovers.

Overall incentives averaged 4.8% of manufacturer’s suggested retail price during the quarter, compared with an estimated industry average of 6.6%. GM’s average transaction price was about $52,000, reflecting demand for full-size trucks, SUVs and luxury vehicles. The company expects dealer inventory to finish the year within its target range of 50 to 60 days.

Global deliveries declined 11% to 1.39 million vehicles, primarily because of lower EV sales and discontinued models. Global market share fell 40 basis points to 7.8%. Still, GM reported its best third-quarter full-size pickup sales and said commercial and government demand helped fleet sales rise 10%. Sales of its family of small SUVs, led by the Chevrolet Trax and Buick Envista, increased 27% and reached a quarterly record.

Digital revenue and China profitability

OnStar ended the quarter with $6.8 billion of deferred revenue, about 40% higher than a year earlier. Recognized revenue exceeded $800 million, up 15%. GM expects OnStar recognized revenue to surpass $3 billion in 2026 and deferred revenue to approach $7.5 billion by year-end.

Super Cruise recognized revenue grew about 60% and remained on track to reach approximately $400 million for the year. GM delivered about 83,000 Super Cruise-equipped vehicles during the quarter and more than 243,000 through the first nine months. The company expects to exceed 850,000 Super Cruise subscribers by year-end, while the attachment rate after the three-year prepaid subscription remained between 30% and 40%.

GM’s China automotive joint venture recorded an eighth consecutive profitable quarter, supported by new-energy vehicle sales. NEVs represented a record share of more than 358,000 domestic retail deliveries. Outside China, GM International’s adjusted result weakened because of higher manufacturing and logistics costs and a negative mark-to-market adjustment related to its Momenta investment, partly offset by higher South American volume and favorable foreign exchange movements.

GM Financial generated $700 million of adjusted earnings before tax, down from $800 million a year earlier. Lower interest expense and higher retail yields were offset by larger provisions for loan losses and increased lease depreciation expense. Retail finance delinquencies of more than 30 days rose to 3.7% from 3.2%, while annualized net charge-offs increased to 1.6% from 1.2%.

Cash deployment and outlook

GM repurchased $2.5 billion of stock in the third quarter, retiring 29 million shares, and paid $200 million in dividends. It bought back another $1 billion of stock in October, exhausting its previous authorization. The board approved a new multiyear $20 billion repurchase program. Automotive cash stood at $23.1 billion at quarter-end, above the company’s $18 billion target average.

The updated guidance assumes U.S. industry annualized sales in the mid-16 million-unit range, compared with the previous low-16 million assumption. GM expects warranty savings at the high end of its $1 billion to $1.5 billion range. It now anticipates about $2 billion of commodity inflation, including logistics and DRAM costs, and approximately $500 million of regulatory benefits. Gross tariff costs are expected at the low end of a $2.5 billion to $3.5 billion range.

Other assumptions include roughly 1% growth in North American ICE wholesales, about 0.5% higher North American pricing and a $1 billion to $1.5 billion improvement in EV losses. Onshoring, supply-chain investments and higher software spending are expected to add $1 billion to $1.5 billion of costs. GM continues to project adjusted pretax earnings of $2.5 billion to $3 billion at GM Financial and some softness in its international operations outside China because of conditions in the Middle East.

GM recorded $11.2 billion of EV-related charges from the second half of 2025 through the third quarter of 2026, including $7.4 billion with a cash impact. It had paid $4.6 billion by quarter-end and expects another approximately $1 billion of cash payments in the fourth quarter, with the remainder due in 2027. The company said these actions substantially complete the material cash charges associated with resizing its battery supply chain and EV footprint.

Management said it continues to believe 2027 can be stronger than 2026, provided customer demand remains firm and commodity, logistics and other cost pressures moderate. Its priorities include launching the next-generation Chevrolet Silverado and GMC Sierra, adding capacity for full-size SUVs and high-volume crossovers, expanding OnStar, Super Cruise and Defense, and controlling warranty, EV, commodity and onshoring costs.

Key uncertainties include the pace of EV adoption, continued demand for full-size pickups and SUVs, tariffs and trade policy, commodity and logistics inflation, competition, performance in China, supply-chain disruptions, product launches, regulatory changes and credit conditions at GM Financial.