General Motors beat Wall Street’s first-quarter expectations on Tuesday, raising its full-year 2026 guidance after booking a roughly $500 million tariff-related benefit.
The boost stems from the US Supreme Court’s February decision to strike down levies imposed under the International Emergency Economic Powers Act, which opened the door to an estimated $160 billion or more in refunds to businesses across the economy.
The Detroit automaker posted adjusted earnings per share of $3.70 for the quarter, well above the $2.62 analysts had expected, according to estimates compiled by LSEG.
First quarter revenue was roughly in line with consensus, coming in at $43.6 billion — a 0.9% decline from the same period a year ago, as policy changes affected the auto industry.
Tariff Refunds
The standout element of the quarter was GM‘s decision to book an approximately $500 million benefit from the Supreme Court’s February ruling that declared IEEPA-based tariffs unlawful.
The 6-3 decision found that the 1979 law did not grant the president authority to unilaterally impose tariffs, and is part of a broader wave of potential refunds to companies that paid duties under the now-invalidated framework.
While GM has not yet received the IEEPA refunds, it chose to record the expected benefit during the first quarter.
The automaker now expects gross tariff costs of $2.5 billion to $3.5 billion in 2026, down from the original estimate of $3.0 billion to $4.0 billion.
The IEEPA refund provided a tailwind; however, GM‘s broader tariff exposure remains substantial.
The 25% Section 232 tariffs on vehicles and auto parts, based on a separate legal authority, were not affected by the Supreme Court ruling and continue to weigh on the industry.
GM‘s chief financial officer Paul Jacobson noted during the company’s fourth-quarter 2025 earnings call in January that tariffs cost the automaker $3.1 billion in 2025.
The burden is expected to persist this year through the Section 232 framework, even as the IEEPA-related costs are refunded.
The US Customs and Border Protection began processing IEEPA refund applications on April 20 through a new portal, with officials saying approved claims could take 60 to 90 days to be paid.
Over 300,000 companies across all industries are believed to be eligible.
Updated Guidance
On the back of the tariff adjustment, GM raised its full-year 2026 adjusted EBIT guidance to between $13.5 billion and $15.5 billion, up $500 million from the previously issued range of $13 billion to $15 billion.
Adjusted diluted EPS was also lifted to $11.50 to $13.50, from $11.00 to $13.00.
Other guidance metrics shifted in the updated outlook.
Net income attributable to stockholders was narrowed to $9.9 billion to $11.4 billion, from $10.3 billion to $11.7 billion previously.
Auto operating cash flow was revised to $16.8 billion to $20.8 billion, down from $19.0 billion to $23.0 billion.
Even stripping out the IEEPA benefit, GM‘s first-quarter adjusted earnings would have beaten expectations and risen roughly 7.5% year over year.
GM Deliveries
GM led the US auto industry in sales during the first quarter, moving 626,429 vehicles — a 9.7% decline compared to a year earlier, though the company said it expects a similar decline for the industry as a whole.
The automaker maintained its position as the second-largest EV seller in the country and grew its market share in full-size pickup trucks.
In Canada, GM remained the overall sales leader with a 15.5% market share, and its EV portfolio posted a 13.1% increase over the first quarter of 2025.
Rebound from 2025
The first-quarter results mark a continued recovery for GM after a turbulent 2025 that saw the automaker absorb $7.6 billion in charges tied to restructuring its electric vehicle production and its China business.
The fourth quarter of 2025 produced a net loss of $3.3 billion after more than $7.2 billion in special charges, the bulk of which were linked to scaling back EV capacity in response to weaker-than-expected consumer demand and the rollback of federal EV incentives.
GM warned last October of an initial $1.6 billion charge from its EV strategy shift, which included halting plans to produce EVs at its Orion Assembly plant and ending BrightDrop van production.
That figure ballooned to over $7 billion by January, encompassing cancelled supplier contracts, non-cash impairments, and China restructuring costs.
GM‘s CFO said in March that the company is working to resolve all remaining EV restructuring payments by the end of the second quarter.
While US EV sales fell 19% in the first quarter to 25,851 units, the automaker has continued to position itself as offering the broadest EV lineup among Detroit’s legacy manufacturers.
A GM board member recently said the company is well-placed because it designed its electric vehicles from the ground up, rather than electrifying existing ICE platforms — an approach he contrasted unfavorably with Ford and Stellantis.
Barra has maintained that EVs remain the company’s long-term strategic direction, even as the near-term production cadence adjusts to match demand.
Outlook
Despite the write-downs, the company entered 2026 with a strong outlook, announcing a $6 billion share repurchase authorization and a 20% dividend increase.
The quarterly dividend declared alongside Tuesday’s earnings report was $0.18 per share, payable June 18 to shareholders of record on June 5.
GM‘s full-year adjusted EBIT midpoint now sits at $14.5 billion, above the $12.7 billion it achieved in 2025.
As of press time, General Motors‘ stock is trading nearly 5% up at $81.60 on Tuesday’s pre-market session.
