General Motors (NYSE: GM) raised its adjusted 2026 earnings and automotive free-cash-flow forecasts Tuesday after stronger North American pricing and lower costs helped lift second-quarter EBIT-adjusted by nearly 30%. The upgrade came with an important qualification: GM lowered its GAAP net-income and earnings-per-share forecasts after incorporating substantially larger special-item charges recorded during the first half, primarily related to its electric-vehicle capacity and manufacturing realignment.
The Detroit automaker reported second-quarter revenue of $48.03 billion, up 1.9% from $47.12 billion a year earlier. EBIT-adjusted increased 29.8% to $3.94 billion, while adjusted diluted EPS rose 41.3% to $3.57. Analysts surveyed by LSEG had expected adjusted earnings of approximately $3.20 per share.
GAAP net income attributable to stockholders fell 31.1% to $1.31 billion, while diluted GAAP EPS declined to $1.41 from $1.91. GM excluded approximately $2.28 billion of EV strategic-realignment items and $177 million of China restructuring items from second-quarter EBIT-adjusted. Those adjustments, which totaled $2.46 billion, were the principal component of the reconciliation between GM’s GAAP net income and EBIT-adjusted, alongside taxes and automotive net interest.
GM Stock Snapshot
General Motors shares closed at $75.80 on July 20, 2026, the final completed trading session before the company released its quarterly results. GM’s 52-week trading range stood at $48.87 to $87.62, according to Yahoo Finance data.
Based on the July 20 closing price, GM shares were approximately 13.5% below their 52-week high and 55.1% above their 52-week low, according to an ABBO News calculation.
Adjusted Outlook Rises as GAAP Forecast Falls
GM increased its full-year adjusted EBIT forecast to between $14 billion and $16 billion, up from its previous range of $13.5 billion to $15.5 billion.
The company also raised its adjusted diluted EPS forecast to between $12 and $14, from $11.50 to $13.50, and increased its adjusted automotive free cash flow guidance to between $9.5 billion and $11.5 billion, from $9 billion to $11 billion.
GM’s GAAP outlook moved in the opposite direction.
The automaker now expects net income attributable to shareholders of $8.4 billion to $9.8 billion, down from its earlier forecast of $9.9 billion to $11.4 billion. Forecast diluted GAAP earnings fell to between $8.98 and $10.98 per share, from $10.62 to $12.62.
The adjustment line in GM’s full-year reconciliation increased to approximately $3.5 billion from $1 billion previously, largely reflecting special-item charges already recorded during the first half. GM’s updated guidance therefore points to stronger underlying operating performance while incorporating the effect of substantially larger year-to-date EV and restructuring charges in its GAAP forecast.
Trucks, SUVs and Cost Reductions Lift North American Profit
GM North America generated adjusted EBIT of $3.45 billion, up 42.7% from $2.42 billion in the comparable quarter. Its adjusted operating margin expanded to 8.6% from 6.1%.
GM attributed the improvement to strong pricing and lower costs, partly offset by commodity inflation and manufacturing expenses from shifting additional production to the United States. In a Q2 letter to shareholders, Chief Executive Mary Barra said that North American demand remained strong, led by pickups and SUVs.
North American wholesale volumes were broadly flat. Lower EV volume of approximately 31,000 vehicles was offset by an increase of about 30,000 internal-combustion vehicles, according to GM’s second-quarter earnings presentation.
The company said lower warranty costs, reduced tariff exposure, and emissions-related savings helped trim costs. Those gains were partly offset by higher commodity, logistics, and memory-chip costs, as well as expenses tied to relocating production to the United States.
GM Remains No. 1 in U.S. Sales Despite Lower Deliveries
GM sold 714,896 vehicles in the United States during the second quarter, down 4% from a year earlier, but remained the country’s largest automaker by total sales.
The company attributed the decline to a smaller EV market, discontinued vehicles and some inventory constraints. GM continued to lead the U.S. market in full-size pickup trucks and large SUVs and remained the country’s second-largest EV seller.
Globally, GM delivered approximately 1.4 million vehicles, about 100,000 fewer than in the comparable quarter. Separately, GM attributed the 4% decline in U.S. sales to a smaller EV market, discontinued vehicles including the Chevrolet Malibu and Cadillac XT4, and some inventory constraints.
EV Adjustments Widen the Earnings Gap
GM recorded a $2.28 billion EV strategic-realignment adjustment during the second quarter. The charges were related to changes in the company’s EV capacity and manufacturing footprint, including the realignment of its Ultium operations.
GM said the quarter’s EV-related charges included non-cash write-offs for compliance-related assets and other impairments, as well as cash charges connected with supplier claims and efforts to resize the battery supply chain with its joint-venture partners.
The company has recorded $10.9 billion in EV-related charges since the second half of 2025, of which $7.2 billion carried a cash impact. GM said it had paid $4.5 billion of those cash-related charges by the end of the second quarter and that the actions substantially completed the material cash costs expected from aligning EV capacity with changes in regulatory policy.
For the first half of 2026, GM recorded approximately $3.36 billion in EV strategic-realignment adjustments and about $3.46 billion in total earnings adjustments.
These expenses explain how adjusted earnings can rise sharply while GAAP net income declines. The operating business performed better during the quarter. However, the restructuring of GM’s EV investment and manufacturing plans continued to generate high costs outside the company’s non-GAAP EBIT-adjusted measure.
Adjusted EPS also benefited from a lower diluted share count following GM’s repurchase activity. The company said higher adjusted operating profit and fewer weighted-average diluted shares helped lift adjusted earnings per share by 41%.
Cash Flow Improves, but Adjustments Also Increase
GM generated $5.07 billion in automotive operating cash flow during the quarter, up 9% from $4.65 billion a year earlier.
Adjusted automotive free cash flow rose 78% to $5.03 billion from $2.83 billion. GM attributed the improvement primarily to higher adjusted automotive EBIT, as well as the timing of tariff reimbursements and capital expenditures.
However, the company’s adjusted free cash flow reconciliation added back approximately $1.87 billion related to EV strategic realignment during the quarter.
A similar distinction appears in the annual forecast. GM raised its adjusted automotive free cash flow guidance, but lowered its automotive operating cash flow forecast to between $15.4 billion and $19.4 billion, from $16.8 billion to $20.8 billion.
The adjustment line in GM’s automotive cash-flow reconciliation increased to approximately $4.1 billion, compared with $2.2 billion in the previous guidance. Investors therefore need to consider both operating cash flow and the adjusted measure when evaluating how much cash GM’s automotive business is expected to generate.
International and Finance Results Were Mixed
GM International reported adjusted EBIT of $190 million, down 6.6% from $204 million a year earlier. Equity income from China increased to $83 million from $71 million.
GM Financial’s adjusted earnings before tax fell 14% to $605 million, from $704 million. The decline in the financing business and lower international profit partly offset the improvement generated by GM’s North American operations.
Tariffs and Inflation Remain Second-Half Risks
GM maintained its estimate that tariffs would reduce 2026 profit by between $2.5 billion and $3.5 billion.
The company also expects between $1.5 billion and $2 billion of pressure from raw-material inflation, computer chips and logistics. Moving additional manufacturing work to the United States and increasing software spending are expected to add another $1 billion to $1.5 billion in costs, according to Reuters’ report on GM’s second-quarter results.
GM’s stronger adjusted forecast indicates that pricing, warranty improvements and North American vehicle profitability are currently absorbing those pressures. The durability of that performance will depend on demand for trucks and SUVs, tariff mitigation and the company’s ability to reduce EV-related expenses.
What the Quarter Means for GM Investors
GM’s second-quarter results support a stronger underlying earnings outlook. North American adjusted EBIT rose more than 40%, the region’s operating margin expanded by 2.5 percentage points and adjusted automotive free cash flow increased substantially.
The guidance revision, however, was not a uniform upgrade.
Adjusted EBIT, adjusted EPS and adjusted automotive free cash flow forecasts increased, while projected GAAP net income, GAAP EPS and automotive operating cash flow declined. Expected earnings and cash-flow adjustments also rose considerably.
The next test is whether GM can preserve its North American pricing and cost advantages while reducing the EV, restructuring and onshoring expenses that continue to widen the gap between its GAAP and adjusted performance.
