GM: First-Quarter US Sales Excellent, but Likely at the Expense of the Rest of 2025

Morningstar’s Metrics for General Motors

• Fair Value Estimate: $73.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: High

First-quarter US auto sales to consumers and fleet customers rose 4.8% year over year, and March grew 10.7% (15% adjusting for selling days), with a seasonally adjusted annualized selling rate of 17.77 million (the best it’s been since April 2021).

We believe consumers pulled sales forward into March because of tariffs due to start in April. We expect tariffs to really hurt sales starting around May or June, once tariff-free inventory depletes from dealer lots. There are as many as four possible tariffs hitting US auto imports in April. Assuming the 25% tariffs on Canada and Mexico start April 2 (even for US-Mexico-Canada Agreement-compliant vehicles), plus 25% April 3 tariffs and the normal 2.5% US tariff on foreign autos, many vehicles will have at least a 52.5% tariff on them, unless President Donald Trump enacts exemptions. We don’t see a scenario in which consumers avoid paying at least some of these tariffs, so we lower our 2025 US light vehicle sales forecast range to a midpoint of 15.5 million from 16.3 million.

General Motors GM had a strong first quarter, with US deliveries up 16.7%, and its best first quarter since 2018. Chevrolet had its best first quarter since 2019, up 13.7%. GMC had a record first quarter, up 17.6%. Buick its best first quarter since 2006, up 39.3%. Cadillac retail volume rose 21% (25% in California) to have its best first-quarter total since 2008. GM’s retail channel sales increased 15% for their best first quarter since 2018. Electric vehicle volume nearly doubled to 31,887, mostly from the Chevrolet Equinox, Cadillac Escalade IQ, and Cadillac Optiq.

With GM’s incentives as a percentage of average transaction price at about 4% (about 300 basis points below the industry average), we expect pricing and volume to be strong contributors to the firm’s first-quarter earnings, which will be announced April 29. We expect tariffs will necessitate a significant 2025 guidance cut or withdrawal.