General Motors reported strong second-quarter 2026 results, with revenue of $48 billion (up $900 million year-over-year) and EBIT-adjusted of $3.9 billion (up $900 million). EPS diluted adjusted for the first half reached $7.27, a record and up 35% year-over-year, exceeding six of the last ten full-year results. The company raised its full-year 2026 guidance for the second time this year: EBIT-adjusted now $14-$16 billion, EPS $12-$14, and adjusted automotive free cash flow $9.5-$11.5 billion.

Performance was driven by robust demand for full-size pickups and SUVs, disciplined pricing (incentives 1.5-2 points below industry average), and margin expansion. North America EBIT-adjusted margin rose 2.5 points to 8.6%, back within the 8%-10% target range. The company benefited from lower EV losses, warranty improvements, and emissions-related regulatory savings. These gains partially offset commodity inflation, logistics costs, and DRAM increases.

Business highlights include record Super Cruise-equipped vehicle sales, a 42% share of U.S. full-size pickups (10 points ahead of the nearest competitor), and strong fleet sales. GM Defense revenue is expected to reach ~$700 million in 2026, with a 30% CAGR and double-digit margins. GM Insurance expanded to 21 states, covering over 60% of U.S. sales. Software and services revenue grew 20% year-over-year to $800 million in Q2, with deferred revenue of $6.3 billion, up nearly 50%. The company recorded $2.3 billion in EV-related restructuring charges in Q2, substantially completing material cash charges.

Looking ahead, GM expects 2027 to deliver growth in revenue, margins, EBIT, and free cash flow, supported by the launch of next-generation Silverado and Sierra light-duty pickups, increased full-size SUV capacity, continued improvement in EV profitability, and expansion of high-margin digital services. The company is onshoring manufacturing capacity to over 2 million units annually, reducing tariff exposure. Capital allocation remains disciplined, with $3.5 billion remaining under the current buyback authorization.

Key risks include gross tariff costs of $2.5-$3.5 billion (flat year-over-year), commodity inflation of $1.5-$2 billion, and potential Middle East disruptions. However, management's confident tone and multiple growth levers—including software, defense, and insurance—position GM for continued outperformance.

Financial Performance

• Revenue: Q2 $48.0B (+$0.9B YoY); H1 $92.0B
• EBIT Adjusted: Q2 $3.9B (+$0.9B YoY); H1 $8.2B
• EPS Diluted Adjusted (H1): $7.27 (+35% YoY, record)
• Adjusted Automotive Free Cash Flow: Q2 $5.0B (+$2.2B YoY); H1 $6.3B
• EBIT Margin (total company): +1.8pp YoY in H1

Business Segments

• North America: EBIT adjusted $3.4B (+$1.0B YoY), margin 8.6% (+2.5pp YoY). Drivers: strong pricing, lower EV losses, warranty/regulatory tailwinds. U.S. dealer inventory 511k units (55 days supply).
• GM International (ex-China): EBIT adjusted $100M. Middle East impacted by shipping disruptions, offset by South America strength.
• China Equity Income: $100M (profitable despite difficult environment).
• GM Financial: EBT adjusted $600M; dividends to GM $250M. Full-year guidance $2.5-$3.0B EBT.

Key Metrics

• U.S. Full-size Pickup Share: >42% H1 (10pp above #2), record fleet deliveries
• EV Loss Improvement: $500M realized in H1; targeting $1-$1.5B full-year improvement
• Warranty: $500M H1 benefit; full-year guidance raised to $1-$1.5B improvement
• Pricing: $600M H1 benefit; full-year NA pricing expected up ~0.5%
• Software & Services Revenue: Q2 $800M (+20% YoY); deferred revenue $6.3B (+50% YoY)
• Tariff Costs: Gross $2.5-$3.5B full-year; Q2 ~$900M
• Commodity/Logistics/DRAM Headwind: $600M H1; full-year $1.5-$2.0B
• Onshoring Costs: ~$400M H1; full-year $1-$1.5B
• Share Repurchases: Q2 $2B (~25M shares); H1 $2.8B (~36M shares); diluted shares 893M (down 8% YoY, 35% from Q2 2023)

EV Restructuring

• Q2 charges: $2.3B ($0.9B supplier cash, $0.7B JV cash, $0.7B non-cash write-offs)
• Cumulative: $10.9B charges since H2 2025; ~$7.2B cash impact; $4.5B paid

Official Guidance (FY2026)

• EBIT Adjusted: $14-$16B (up from $13.5-$15.5B)
• EPS Diluted Adjusted: $12-$14 (up from $11.50-$13.50)
• Adjusted Automotive Free Cash Flow: $9.5-$11.5B (up from $9-$11B)
• Assumptions: U.S. SAAR low 16M; no material escalation in Middle East; no significant increase in commodity/inflation.

Qualitative Commentary for FY2027

• Expect growth in revenue, margins, EBIT, and free cash flow.
• Drivers: continued EV profit improvement, OnStar digital revenue growth (double-digit growth in 2027), incremental warranty improvements, fixed cost efficiencies, full year of new Silverado/Sierra pickups, increased full-size SUV capacity, and share repurchases.
• Launch of next-gen light-duty pickups in December 2026 with three assembly plants and three V8 engine plants. Full volume opportunity in late 2027/2028.
• Onshoring costs ramp in H2 2026; expect normalization as production starts in 2027.
• GM Defense targeting 2026 revenue ~$700M and positive EBIT; long-term revenue CAGR >30% with double-digit margins.
• GM Insurance on track to cover >80% of U.S. sales.
• Expect H2 2026 NA ICE wholesales up ~1% YoY; EV wholesales slightly up in H2.
• Q4 2026 expected weaker seasonally due to truck launch costs and 35k unit volume headwind.
• No significant additional investment in autonomy or R&D expected for 2027.

Q (Joe Spak, UBS): On Super Cruise scaling: Expectation for pricing structure changes (upfront vs. monthly) and availability across other vehicles?

A (Mary Barra & Paul Jacobson): No specific pricing announcement. Super Cruise will be standard on high-end Silverado/Sierra trims and optional on most others starting with launch. Attach rates in 30-40% range. Deferred revenue $6.3B, approaching $7.5B by year-end. Million additional subscriptions expected in 2026. Proliferation driven by cost reduction and product evolution.

Q (Dan Levy, Barclays): Guidance raise seems less than sum of positive drivers (pricing, warranty, volumes, commodities). What are the offsets?

A (Paul Jacobson): Commodity costs stabilized but are not a tailwind; they are at elevated levels. First-half outperformance gave confidence to raise guidance. Offsets include backloaded costs for Orion ramp, DRAM inflation, and onshoring investments.

Q (Andrew Percoco, Morgan Stanley): Sodium-ion battery investment with Peak Energy: Strategy, commercialization timeline, and capital deployment?

A (Mary Barra & Paul Jacobson): Sodium-ion promising for grid storage due to low cost and abundant materials. Partnering capital-efficiently rather than building own plants. Production-validated cells targeted for 2027-2028, production before end of decade. May eventually enter vehicles. GM has rights to technology.

Q (Itay Michaeli, TD Cowen): Implied H2 pricing moderation vs H1 strength: Is that conservatism or reflecting July trends?

A (Paul Jacobson): Lapping prior-year price increases. No change in incentive environment. Not a reflection of weaker July trends.

Q (Mike Ward, Citigroup): Could digital, defense, and insurance together eventually exceed GM Financial's contribution?

A (Paul Jacobson & Mary Barra): Yes, over a five-year horizon. Deferred revenue growing, software-like margins (~70% on OnStar). GM Defense and GM Insurance scaling, less cyclical than auto.

Q (Emmanuel Rosner, Wolfe Research): New truck volume opportunity: lean inventories, launch transition. When does volume ramp?

A (Mary Barra): Record sales this year maintained into next year. Volume growth in late 2027/2028 once all engine plants and Orion capacity are online. Q4 2026 has 35k unit headwind from launch.

Q (Tom Narayan, RBC): How does onshoring align with potential 50% U.S. content requirement? Are current plans enough?

A (Mary Barra): GM has done significant onshoring since chip crisis. Working with suppliers. U.S.-Mexico negotiations ongoing. Believes administration understands need for competitive North American auto industry.

Q (Mark Delaney, Goldman Sachs): Color on memory supply agreement with Micron? Cost visibility for 2027?

A (Mary Barra): Strategic long-term relationship since 2022. Also works with Samsung. Not disclosing pricing but provides stable supply and joint technology roadmaps for future innovation.

Q (Raj Gupta, J.P. Morgan): Update on 2028 eyes-off, hands-off autonomy launch. Any change in approach?

A (Mary Barra): Program on track, meeting milestones. Vehicle demo went well. Aggressive but safe execution.

Q (Raj Gupta, follow-up): Onshoring costs: Are they one-time or recurring? Any other investments (autonomy, R&D) expected for 2027?

A (Paul Jacobson): Bulk of setup costs are recurring (hiring/training) but lapping effect in 2027. No significant additional investment in autonomy or R&D expected.