Biggest US carmaker's profits plunge as CEO admits the hard truth about EVs

America's largest automaker has just reported some shocking sales numbers. It also said EVs remain its 'north star.'  

General Motors — the company behind classic American brands like Chevrolet, Cadillac, GMC, and Buick — reported a $1.1 billion drop in net income compared to the same quarter last year. 

Profits fell from $2.93 billion to $1.89 billion year-over-year. Compared to last quarter, they’re down 35 percent. 

GM had already warned that its profitability would shrink this year. 

The company is currently reinvesting billions into US manufacturing to sidestep potential tariff costs from President Donald Trump's 25 percent import levies. 

In May, the automaker scaled back its yearly earnings estimate, and predicted it would spend between $4 billion and $5 billion on the import taxes. 

As GM ramps up its American manufacturing footprint, it's also leaning more heavily than expected on internal combustion engine vehicles. 

The automaker is investing nearly $900 million to overhaul a powertrain plant in Buffalo, New York, where it will build gas-powered V8 engines for its high-margin trucks and SUVs.

'Overall, GM is well positioned to succeed in an ICE market that now has a longer runway,' the top boss, Mary Barra, said in a letter to shareholders. 

Last week, the company paused production at one of its Mexican truck plants before announcing a boost in production from an assembly plant in Michigan.  

Still, Barra emphasized that the company’s long-term profitability hinges on electric vehicle growth. 

'We are also growing in EVs because people love the design, performance, range, and value,' she said. 

'Five years ago, the EV market essentially had one player. Today, there are 30, and Chevrolet became the number two EV brand in the second quarter, while Cadillac became the number five EV brand overall and the luxury EV leader.'