Transcript: General Motors Company (GM) Q3 2026 Earnings Call

Fort Wayne will follow in Q1, and we will launch the trucks at Orion in Q2.

We expect to build roughly the same number of trucks in ’27 as in ’26, and then in ’28, we will have incremental capacity to support segment and market share growth.

Super Cruise, OnStar and Software Revenue Growth

Trucks will also be a big driver of incremental Super Cruise adoption and digital revenue as we make the technology standard on high-end Silverado and Sierra LD trims and offer on most others.

We expect full-size truck Super Cruise penetration to grow 4 to 5 times next year, reflecting strong customer demand and our ability to scale the technology across critical customer segments.

The base is already strong and growing rapidly.

Year-over-year, deferred revenue from software and services is up 40%.

For the full year, we’re on pace to approach $7.5 billion in deferred revenue driven by 1 million new OnStar subscriptions and a 1 million strong Super Cruise equipped car park.

The quality of the Super Cruise driving experience and frequent customer engagement with the technology underscores why it is so successful with customers.

Our Super Cruise-equipped vehicles travel well over a cumulative million miles hands-free each day. Nearly 70% of our customers use it at least once a month, and I’m confident we can grow our Super Cruise installed base by close to 50% next year.

GM Defense Momentum

I’ll close by recognizing the tremendous progress GM Defense has made since our last call, including several new multi-year contract awards that will help us drive annual top-line growth of more than 30% with double-digit margins.

During the quarter, the Pentagon announced increased production volumes for the ISV, including a contract for the ISV utility variant.

These are part of a more than $1 billion potential ISV award based on the U.S. Army’s procurement objectives subject to congressional appropriation.

The Army has contracted with us to deliver Silverado HD-derived tactical vehicle prototypes for its ISV heavy competition.

We have signed contracts with 4 customers since June for our factory-armored Suburban Shield VIP transport. Our EPIC mobile energy system is now certified and ready for sale to customers.

And we delivered our first component set to Lockheed Martin for the Patriot PAC-3 less than a month after we signed a formal contract.

As Lockheed said at the time, our ability to deliver components that can traditionally take months to years to produce underscores the effectiveness of defense and commercial partnerships and our own capabilities.

These are all very positive developments for our country, our partners, taxpayers, and our business.

Thank you, and I’ll now turn the call over to Paul.

CFO Paul Jacobson on Q3 2026 Financial Results

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Thank you, Mary, and good morning, everyone. Thank you for joining us. I want to begin by recognizing the entire GM team.

Their hard work and consistent execution are showing up in both our operating performance and consistently in our financial results.

Revenue for the quarter was a record $50 billion, up 3% year-over-year. EBIT adjusted was $4.1 billion, up 22% year-over-year, and EPS diluted adjusted was up more than 30% year-over-year to $3.70.

The industry backdrop remains healthy with a total industry SAAR in the upper 16 million unit range in the 3rd quarter, with resilient demand across trucks, SUVs, and fleet.

Our U.S. sales totaled more than 670,000 vehicles in the quarter.

Retail sales of 645,000 were up slightly year over year despite the impact of discontinued models.

And our light-duty full-size pickups continue to perform exceptionally well in the final year of their product cycle, with sales up 9% year over year.

This leaves us on track to lead the industry in full-size pickup sales in 2026 for the 7th consecutive year. And with deliveries of our all-new light-duty trucks expected to begin in the late 4th quarter, We plan to carry this momentum into 2027.

In terms of the changeover, we have already completed 4 down weeks at Silao Assembly ahead of starting production of the new truck last week. To ensure our high-quality launch, production will start at measured pace and ramp up over the coming months and quarters to more normalized levels.

At Fort Wayne, we are planning 4 down weeks beginning in mid-December, with production scheduled to restart in January.

In preparation for the downtime, the sell-down of the existing truck is on track with inventories at planned levels and incentives as a percentage of MSRP that are several hundred basis points lower than prior truck changeovers.

This is part of the broader discipline with which GM has been operating over the past 5 years. With that in mind, we expect to finish the year with overall inventory in our 50 to 60-day target range.

Share Repurchases and New $20 Billion Authorization

On the cash side, continued strong cash generation supports both our growth-focused investments and ongoing share repurchases, which combine nicely to drive continued EPS growth.

In the 3rd quarter, we repurchased $2.5 billion worth of shares.

That reduced our diluted share count by approximately 27 million shares to around 866 million, or 9% below the 3rd quarter 2025 level.

So far in October, we have already repurchased another $1 billion. That brings our year-to-date buybacks to $6.3 billion and completes the prior board authorization.

This morning, we announced a new $20 billion multi-year share repurchase authorization representing more than 25% of our current market capitalization.

The size and duration of this authorization are a meaningful statement of the board’s confidence that our cash generation is sufficient to continue investing in the future of the company and returning capital to shareholders.

Now let’s turn to more details on our 3rd quarter performance.

Total company revenue of $50 billion was up $1.4 billion year over year.

ICE volumes were up 8% year over year, while EV volumes declined as we lapped the expiration of the consumer purchase incentive in the 3rd quarter of 2025 and aligned EV production with demand.

EBIT adjusted was $4.1 billion, up $700 million year over year.

The improvement was driven by core business performance, including a higher mix of full-size pickups and lower warranty expense, partially offset by higher commodity and onshoring costs.

Adjusted automotive free cash flow was $5.9 billion, up $1.7 billion year over year. The improvement was driven by higher earnings and tariff timing.

EV Restructuring Charges

Regarding EV charges, as I mentioned last quarter, we moved quickly with our suppliers and partners and have substantially completed the material cash charges we expect to incur as we align our EV capacity and manufacturing footprint with changes in regulatory policy.

We incurred an additional $0.2 billion of cash charges in the 3rd quarter, bringing total cash charges incurred since the end of the first half of 2025 to $7.4 billion.

To date, $4.6 billion of this has been paid, of which $4.2 billion was paid in 2026 to date. We expect to pay another roughly $1 billion in the 4th quarter and the remainder in calendar year 2027.

As a result, free cash flow available to be returned to shareholders next year should benefit from a significant year-over-year step-down in supplier EV settlement payments.

Regional Results: North America, International and GM Financial

Now let’s move to our regional results for the 3rd quarter.

North America continued its strong performance, delivering EBITDA adjusted of $3.6 billion, up $1.1 billion or 43% year over year.

Margin was 8.7%, an improvement of 2.5 points from a year ago when tariffs were first put into place.

Having worked through much of that pressure, we are solidly back within our 8 to 10% margin target, a clear marker of the progress the team has made. The improvement was broad-based but included a higher mix of full size pickups, lower EV losses from rightsizing our capacity, and continued warranty expense reductions.

These gains were partially offset by commodity inflation, including logistics and higher DRAM costs, along with higher manufacturing costs related to onshoring production to the U.S.

OnStar Digital and Super Cruise delivered recognized revenue of over $800 million in the 3rd quarter, up 15% year over year. We are on track for more than $3 billion in realized revenue for calendar 2026 and expect to approach $7.5 billion in deferred revenue by year-end.

Looking forward to 2027, we anticipate another year of double-digit growth in realized revenue.

GM International EBIT adjusted excluding China equity income was break-even in the 3rd quarter, down $200 million year over year, driven by a negative $100 million mark-to-market adjustment for an investment in Momenta, along with higher manufacturing and logistics costs partially offset by higher volume in South America and foreign exchange.

China equity income was $32 million, recording its 8th consecutive quarter of profitability.

A trend we expect to continue in the 4th quarter.

New energy vehicles accounted for more than 60% of GM China’s 3rd quarter sales, and the team remains focused on execution, cost efficiencies, and mix optimization to deliver ongoing profitability.

GM Financial delivered EBT adjusted of $700 million and paid $250 million in dividends to GM in the quarter.

Consumer credit performance remained resilient and consistent with our expectations.

The business remains on track with its full-year EBT adjusted guidance range of $2.5 to $3 billion and to pay full-year dividends to GM at a level similar to last year, reinforcing its strategic value within the enterprise.

Updated Full-Year 2026 Guidance

Let’s turn now to our calendar year 2026 guidance.

Following another strong quarter, we’re updating our full-year outlook as follows.

We now expect EBIT adjusted of $14.5 to $15.5 billion compared with our previous range of $14 to $16 billion.

EPS diluted adjusted narrowed to a range of $12.75 to $13.75 from $12 to $14, reflecting the benefit of our share buybacks to date.

Capital expenditures at the lower half of the $10 to $12 billion range and adjusted automotive free cash flow in the $11.5 to $12.5 billion range, up from $9.5 to $11.5 This improvement is being driven by operational excellence, lower-than-projected capital expenditures, and tariff timing.

Now let me update you on a few key assumptions underlying our updated guidance.

Let’s start with the industry backdrop.

The U.S. market remains resilient.

We expect total SAAR to be in the mid-16 million unit range for the full year, which implies approximately 16 million for the rest of the year, consistent with what we are seeing in October.

In North America, we expect 4th quarter ICE volumes to be lower than usual, primarily due to the launch of our new full-size trucks. We anticipate a year-over-year volume headwind of approximately 35,000 full-size pickups.

Headwinds from lower truck volumes in the 4th quarter are expected to be largely offset by tailwinds from price in North America, including benefits from the new truck launch.

Year to date, North American pricing is up $400 million. We continue to expect a full-year pricing tailwind of 0.5% in North America, with the remainder of the benefit expected to be realized in the 4th quarter.

Turning to EVs, we remain on track to reduce losses by $1 to $1.5 billion for the full year, driven by rightsizing our EV capacity and significantly lower volumes.

We expect modest additional loss reduction in the 4th quarter as we lap the expiration of the consumer purchase incentive last year.

On warranty, following our $600 million 3rd quarter performance, our year-to-date improvement is approximately $1.1 billion on a year-over-year basis.

For the full year, we now expect warranty to be closer to the high end of our $1 to $1.5 billion in full-year improvement.

Emissions-related regulatory savings are around $500 million year to date, and we expect a minimal benefit in the 4th quarter as we lap savings from last year.

With respect to tariffs, we have incurred approximately $1.8 billion of tariff costs year to date, net of IEEPA reversal benefits, and we now expect gross tariff costs to come in at the low end of our $2.5 to $3.5 billion range for the full year.

And finally, on the tax line, we continue to expect a 20 to 21% effective tax rate for the full year. This includes a higher tax rate in the 4th quarter, which is expected to be in the 25 to 27% range, driven by a mix of one-time discrete items affecting timing.

Commodity, Logistics and Memory Cost Headwinds

Now let’s turn to the headwinds.

As the conflict in the Middle East has continued, commodity and logistics costs have intensified since our 2nd quarter earnings update.

Copper prices are at record levels while HRC steel prices are at 4-year highs.

Spot prices for HRC steel and copper are each up 10 to 15% since July and approximately 50% versus last year’s average.

Collectively, inflation is adding approximately $400 million in incremental costs for the calendar year, with the majority of that impacting the 4th quarter.

As a result, we now expect the headwind from commodity inflation, logistics, and DRAM costs to be around $2 billion for the full year.

In the 3rd quarter, we incurred approximately $700 million primarily related to commodity costs year over year, bringing the calendar year-to-date headwind to approximately $1.3 billion.

Separately, we are investing approximately $1 to $1.5 billion this year to onshore production to the U.S., strengthen our supply chain, and expand our software capabilities.

We expect these costs to continue to ramp in the 4th quarter ahead of additional U.S. capacity additions in 2027.

Finally, turning to our international operations, we expect continued ongoing Softness in GM International, reflecting headwinds from the dynamic environment in the Middle East.

2027 Outlook

Let’s turn next to 2027. Assuming market conditions in the tariff environment remain broadly. similar to 2026 and recent commodity pressures moderate, we continue to believe we can grow revenue, margins, and EBITDA adjusted next year.

It’s too early to try to predict where commodity prices will land in 2027. However, if we were to simply annualize the recent incremental commodity inflation since July, it would translate into an additional $1 to $1.5 billion of EBITDA-adjusted headwind for 2027, which would result in a total headwind for 2027 of roughly $2 billion.

Our growth plan is supported by our product cycle and the ongoing operational discipline that investors have come to expect from General Motors. The opportunity is centered on 4 key GM-specific drivers.

First, launching our new truck flawlessly and capturing a rich mix in its first year.

Second, unlocking additional capacity in full-size SUVs and high-volume crossovers.

Third, growing our adjacencies in OnStar, Super Cruise, and defense.

And fourth, managing costs across warranty, EVs, fixed costs, and onshoring.

The bottom line is that we have demonstrated time and again our ability to roll up our sleeves and execute.

We have set a high bar for ourselves and the team is working to deliver another year of growth for our shareholders.

We have a great product portfolio that is only going to get better in 2027 and beyond.

Thank you. And now we’ll move to the Q&A portion of the call.

Question-and-Answer Session

OPERATOR: Thank you.

As a reminder to analysts, we are asking that you limit your questions to one and a brief follow-up so that we may get to everyone on the call. To ask a question, press star then 1 on your telephone keypad to join the queue. To withdraw your question, press star then 2. Our first question comes from Mark Delaney with Goldman Sachs. Your line is open.

Mark Delaney, Analyst Goldman Sachs: Yes. Good morning, and thank you very much for taking the question. I understand the change in the cost environment that GM is seeing heading into 2027.

I’m hoping you can talk a little bit more on some of the tools GM may have at its disposal in order to try and manage that? And to what extent GM could potentially utilize net pricing to help offset what’s a higher cost environment, especially given your expectation for a measured ramp of the full-size pickup trucks?

Mary Barra, Chair and CEO, General Motors Company: Mark, well, when you look at the increases, as Paul mentioned, we saw it happen in just the last couple months. And so we really haven’t had time as a team to go work to find the offsets.

We do have significant tailwinds next year when we look at continued warranty improvement. We’re seeing it this year. We believe we’ll continue it into next year. And as we’ve said, although volume will remain roughly flat from a new truck perspective. We do think there is some price and mix opportunity there.

We also see growth opportunities in OnStar and Super Cruise. We see continued improvements in EV profitability. And then, we are going to continue to work at fixed costs. There’s a lot of opportunity, we believe, especially as we continue to implement and leverage AI to improve the business and make it more efficient.

So like this team always does, we just— because this has happened so recently, we’re going to go to work and we’ll have more to say when we give full year 2027 guidance at the end of the 4th quarter. But, we obviously have work to do and we plan to do it.

Mark Delaney, Analyst Goldman Sachs: That makes sense. And my follow-up is just a clarification on what GM is currently assuming. So you said the assumption that ’27 is a better year than ’26 does assume that cost pressures tied to commodities, logistics and memory moderate. When you talk about moderation, do you mean that the spot prices just need to level off from current levels, or would you actually need to see spot prices decline? Thank you.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Mark, it’s a little bit too early to call commodity prices in ’27. So what we’re really trying to do here, as we said in July where we highlighted the tailwinds And we said assuming the environment remains consistent.

We have seen a significant amount of inflation, as I called out in the prepared remarks, really just in the last, call it 8 to 10 weeks. And, should we see prices at this level, it makes that more challenging heading into next year. So we’re really looking for a little bit of moderation from the most recent increase that we’ve seen.

But as Mary said, we’re continuing to work through our budget process. So we won’t give any definitive guidance on the year and where it’s going to come out. But obviously it’s gotten a little bit more challenging with this additional inflation that we’ve seen. since that disclosure.

So, I don’t think anything has changed. The tailwinds are the tailwinds. We have a lot of mixed benefits coming in with the first year of the truck. But, we’ll continue to watch it and hopefully become what we’re known for. But the goal remains to grow next year as it does every year.

Mark Delaney, Analyst Goldman Sachs: Understood. Thank you.

OPERATOR: Thank you. Our next question comes from Itay Michaeli with TD Cowen. Your line is open.

Itay Michaeli, Analyst TD Cowen: Great. Thanks. Good morning, everybody. Maybe first question just on the higher free cash flow guidance for the year. Paul, maybe talk a little bit more about what kind of the drivers there. I think you mentioned maybe kind of lower And the CapEx outlook as well? And how much of the strength that you’re seeing this year may be sustainable into next year?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah, good morning, Itay. Thanks for the question. A couple of things. One, we are coming in probably at the lower end of our capital. We’re certainly seeing a little bit of a reduction in capital spend as everything comes online in that $10 to $12 billion range. So that unlocks some free cash flow.

Also, if you recall earlier this year when we talked about the IEEPA refunds, we brought the EBITDA guidance up, but we didn’t bring the cash flow guide up because we were uncertain. We’ve seen some success in getting IEEPA refunds both in terms of our own as well as the second order from our supply base. That’s given contributed to some of that benefit.

As we look forward into 2027, I mean, should we have a year where we can grow earnings, we would expect that free cash flow would be pretty consistent, if not a little bit higher. But remember, our GAAP cash flow, so our actual sort of cash available for investment, should be significantly higher as we lap the bulk of the cash restructuring work that we did on the EV side.

So we’re looking for a bullish year on cash generation overall in 2027, irrespective of what we’ve seen with the commodity inflation recently.

Itay Michaeli, Analyst TD Cowen: That’s very helpful. Thank you. As a quick follow-up, as we lap the EV restructuring and as you have a number of updates coming in 2028, curious if you could kind of share how we should think about kind of GM’s breakeven Given EV volume, let’s say in the 2029 timeframe and kind of latest thoughts on the path to EV profitability would be helpful. Thank you.

Mary Barra, Chair and CEO, General Motors Company: Yeah, I think it’s a little bit too soon to tell. As we’ve said, we’ve had a good year of EV profitability improvement, primarily from lower volumes as we’ve adjusted and also the fixed costs coming out of the system as we restructure. So that’s a big benefit in ’26.

We’ve said that ’27 will be a year of probably lower benefits. but still maybe improvement versus ’26. And then ’28 and ’29, as we get into LMR and the next generation battery cells and packs, we should see another step function improvement in profitability.

We’re going to continue to watch volumes. We think with these oil prices and these fuel prices that EV penetration may continue to go up. And we want to make sure we’re ready for that. We’re the number 2 producer of EVs in the U.S., and we’ve got a strong portfolio and one in which we’re committed to improving the profitability of it.

Itay Michaeli, Analyst TD Cowen: That’s very helpful. Thank you.

OPERATOR: Thank you, Todd. Thank you. Our next question comes from Dan Levy with Barclays. Your line is open.

Dan Levy, Analyst Barclays: Hi, good morning. Thanks for taking the question.

So one of the points in your commentary on 2027 is it talks about customer demand remaining strong. And I know this has been a constant debate in the industry. I think people are just amazed by how resilient the auto industry has been. But, we’re getting the latest round of questions of health to the quality of consumer, rising rates.

So can you just talk about, given the latest backdrop, what your view is on the ability of the market to absorb this continued very high trim product and potentially incremental volume on your trucks as you expand capacity? Maybe just help disaggregate what we’re seeing from the consumer as a whole versus the average consumer of your products.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Dan, I’ll give it a shot. And Mary can help if I miss anything here. I think as we’ve said now for a number of years, when you look at a lot of Consumer sentiment surveys, they really have become disaggregated from consumer behavior on the ground.

And that’s evident in our average transaction price. It’s evident in our trim mix. It’s even evident in what we see in GMF where no noticeable shifts in delinquencies, defaults, etc. So I think the consumer is held up remarkably well.

That being said, we know from that sentiment and historically, we should continue to watch it. So it’s not necessarily pessimism. It’s really more an abundance of caution of making sure that we’re setting expectations against that backdrop that we’re basing that forward projection on consumer stability. And we think that’s going to continue to be the case because we haven’t seen anything that indicates any weakness right now.

Dan Levy, Analyst Barclays: Okay, great. Thank you.

Second question is about the dynamic in China. And obviously we’ve seen this sharp rise in exports from China. Maybe you can just talk about the extent to which You are participating in this sharp rise of exports.

Is there any benefit to you on the cost side? And then, I know you’re talking about GMI ex-China moderating.

How much of that is sort of the pressure of competition from Chinese OEMs in some of these other regions? What’s your ability to offset that?

Mary Barra, Chair and CEO, General Motors Company: Well, I think when we look at some of the markets where China is working specifically from a South America perspective, we’re still holding share and we are there. There are some of our product portfolio we are exporting from China.

Once the market has allowed the Chinese competition to come in, we’re well positioned to participate with that with Chevrolet products that are true to the Chevrolet brand but have that price point. So we’re holding our own in South America, actually remain strong based on the portfolio. And in South America, Chevrolet is considered a premium brand. So, I think that’s an opportunity for us in some other markets as well.

So again, from a China perspective, I would say in-country, we’re really not seeing that much benefit. I mean, from our China business, we are very proud of the fact that we got to the restructuring early in China and our business is profitable even in the depressed economy that they’re seeing from an overall industry perspective.

So there may be a little bit of benefit because of the opportunity from an export perspective. But Bottom line, we’re seeing that market tougher because of the challenges, but we are participating in the export market and maintaining share due to the strength of our product portfolio.

Dan Levy, Analyst Barclays: Okay. Thank you.

OPERATOR: Thank you. Our next question comes from Joe Spak with UBS. Your line is open.

Joe Spak, Analyst UBS: Thanks, everyone. Good morning. I just want to go back to one of your answers, I think, earlier to maybe to Itay’s question. I think you said, when you were talking about ’27, I know it’s early and There’s still a lot to be determined. But you said— I think you said that if there’s a year where you grow earnings, you’d expect free cash flow to be consistent, if not higher.

And I guess I’m just a little bit curious. I know distributable free cash should be higher because of EV payments, but is there something else we’re not considering with in sort of the free cash flow factors? Like if it’s— if earnings would grow, like why wouldn’t the free cash flow also be higher?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Joe. So, yeah, sorry if my answer was confusing. There’s a couple of reasons why. Number one, if we go into 2027 with the same CapEx guided range of $10 to $12 billion, but we come in at the high end versus the low end, obviously that’s going to be a case where EBIT growth and free cash flow would become a little bit disconnected based on timing.

Second, we do have the added benefit this year of the IEEPA refunds that have come in. That’s not expected to repeat. So, in a like-for-like basis on tariff flows, there’s some upside that we got in ’26 that wouldn’t repeat in 2027.

And generally, you see some small working capital nuances from year to year. But other than that, it should be fairly linear as cash flow from earnings is The connection between cash flow and earnings is pretty constant.

Joe Spak, Analyst UBS: Okay. Thank you for that.

Second question is just, Mary, I think in the past you’ve said you would study hybrids and plug-ins. And I think earlier this month, Sterling Anderson said you’ll listen to customers and they’re part of the plan.

I know you don’t give sort of product announcements away on these calls for competitive reasons. But can you let us know if some of that investment and spending is already occurring? Does that require an additional investment? I mean, I know you have a lot of these technologies internationally, so maybe you could just tell us how you’re sort of thinking about leveraging that and bringing it to scale in the U.S.

Mary Barra, Chair and CEO, General Motors Company: Sure. From a hybrid perspective, we will have hybrids in our portfolio in multiple segments, the key segments that we participate.

If you look at right now, a lot of where the hybrid activity is, it’s in compact car, midsize car and minivans, which are 3 segments we’re not a part of right now. So you have to look— and that’s why I think our sales continue to be so strong. In many cases, we’re building everything we can. I mean, for the Equinox compact SUV is fully maxed out even without a hybrid.

So I think we’re still taking advantage, as Paul said earlier, we’re well positioned from an EV perspective as this continues. But We will have hybrids. They’ve already been added. It’s not going to be additional capex and engineering. And we’ll talk more about them as we get closer to the launch.

Joe Spak, Analyst UBS: Thank you.

OPERATOR: Thank you. Our next question comes from James Picariello with BNP Paribas. Your line is open.

James Picariello, Analyst BNP Paribas: Hi. Good morning, everybody.

Just on the T1 pickup volumes, the expectation is for volumes to trend flat next year.

expected downtime impact slated for the first quarter at the similar 35,000-unit reduction to the fourth quarter? And then can you share any dimensioning of what the targeted incremental full-size SUV capacity might look like for 2027? Thanks.

Mary Barra, Chair and CEO, General Motors Company: Well, as we said, if you look at the full-size truck, we have 3 assembly plants. We also have 3 engine plants that we’re launching. And we’re focused on a flawless launch. It’s on track right now. As we’ve said, we’ll have the first trucks rolling out of the first plant yet this year at the very end of the year.

And then we do have some downtime We haven’t specified it to the exact number of units, but we do have some downtime coming as we get the other 2 plants going. And so that’s why we’re saying really the volume is going to be flat from 26 truck volumes to 27 because we’re in the middle of that launch of these 6 plants.

So as we get into ’28, that’s where there’s an opportunity for plus side, we won’t have any of the changeover downtime, and we’ll also have the benefit of the Orion plant. So ’28 is an opportunity for growing market share in the truck, not only in the U.S., but globally.

James Picariello, Analyst BNP Paribas: Got it. And then as a follow-up for GMI excluding China, what’s the embedded expectation for the 4th quarter regarding the Middle East challenges? Should we anticipate another quarter of EBIT loss? And I know it’s early, but how should we be thinking about this business for next year with respect to the puts and takes? Thank you.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah, James. So, what I would say with respect to the Middle East, it’s largely a wash at the enterprise level because we’re selling a lot of vehicles there that with the right notice and with the right preparation, we can actually redirect many of those vehicles into the U.S., which we have.

The team’s done a really good job of managing that so we’re not losing volume at the enterprise levels. So as long as that persists in the Middle East with that tension, I would expect that you’ll see a little bit more of a lean to North America than you will international, particularly the Middle East.

And then, I think we’re continuing to work with the team to try to mitigate as much of the international competition and deliver value in the pockets where we can and where we’re really competitive. And I think the team’s doing a good job everywhere else in the world being able to do that.

Keep in mind that our international results were also impacted this quarter by about $100 million negative mark-to-market adjustment on Momenta. So if you actually look at the underlying business, it performed marginally better than what the results indicated.

Mary Barra, Chair and CEO, General Motors Company: And James, just to be clear, the vehicles that we’re building, the trucks in the first plant right now, they’ll be in showrooms by the end of the year?

So that’s

OPERATOR: Does that conclude your question?

James Picariello, Analyst BNP Paribas: Yes, thanks. Thank you.

OPERATOR: Thank you. Our next question comes from Andrew Percoco with Morgan Stanley. Your line is open.

Andrew Percoco, Analyst Morgan Stanley: Thanks so much for taking the question. I do want to come back to the 2027 bridge. And obviously, mix and pricing are clearly working in your favor with the new truck. But is there a way to also think about corporate or fixed cost savings as we get into 2027?

I think this is an area where you guys have obviously been very focused. And I’m just curious to the extent we could get more clarity in terms of what that could look like into next year. I think, Paul, you’ve talked about AI integration within the organization and just curious if some of those investments could start bearing some fruit on the cost side.

Mary Barra, Chair and CEO, General Motors Company: Andrew, absolutely. And like I said, with the increase that we saw just in the last 8 to 10 weeks, we’re even doubling down.

But there’s active work going on across the company to really not only make sure everybody’s using AI efficiently to be able to make their job more efficient and make our design processes more efficient, our manufacturing more efficient, which really every single function is leveraging AI is how do we harness that savings from a fixed cost perspective.

I’m not going to quantify it right now. We can do that when we get to the end of 4th quarter and when we announce a officially announced guidance for 2027. But trust that there will be significant work in the fixed cost arena as we move forward. It’s happening today.

Andrew Percoco, Analyst Morgan Stanley: Okay. That’s super helpful color. And I guess just on the buyback announcement, curious if there’s anything you can provide in terms of how we should be thinking about the cadence there. Obviously, you guys have talked about the lack of supplier payments that you have to make next year. Is that a reasonable way to think about potentially the step-up in buyback cadence in 2027 relative to 2026?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Andrew, it’s Paul. First of all, you made me lose a bet because I thought for sure you were going to ask about digital revenue. But I’ll take the question.

On the buyback side, we don’t give any forward commentary on what we’re going to do on buybacks for obvious reasons. But as we’ve talked about, we expect the actual cash flow, the GAAP cash flow to be significantly bigger year over year.

And I think hopefully you look at and the market sees what we did this year, because I know there was a lot of skepticism on our ability to return capital back to shareholders given the EV restructuring. And we completed that authorization ahead of all expectations.

So, the board has demonstrated a commitment to continuing to drive shareholder value this way. We continue to believe that with a double-digit free cash flow yield, we’re compounding the EPS growth of the company. And that’s no shortage of commitment as what you’ve seen for the last several years and expect that to continue going forward as long as the valuation remains depressed.

Andrew Percoco, Analyst Morgan Stanley: Okay. That makes a ton of sense. And I’ll take that digital services question offline. Appreciate it.

OPERATOR: Thank you. Our next question comes from Emmanuel Rosner with Wolfe Research. Your line is open.

Emmanuel Rosner, Analyst Wolfe Research: Great. Thanks so much. I appreciate all the color on the commodities and some of the assumptions. So I think you said around current prices, if the same state at current level, it would probably be a $2 billion additional headwind into 2027. In order for your expectation to grow EBIT in ’27, to be realized. Are you assuming this $2 billion or should it be less than that?

And then I understand it’s early to identify the offsets that are in your control to sort of offset some of these increased commodities. But in the past, you’ve built a very, very strong track record around, call it a downturn playbook, right? The discretionary spending cuts, things that are in your control, restructuring, etc.

Can you maybe just remind us historically, what are those things that you could have as levers and to what extent this could be applicable in the current environment?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. So Emmanuel, thanks for that.

Thanks for the question. On the commodities, as we clearly stated, we would need prices to come off of these levels a little bit to have the confidence to be able to grow at this point. But, we’re in the middle of the budgeting process and we’ll continue to work through that.

So nothing specific on the headwinds or tailwinds because we don’t want to get ahead of expectations and where the market is as we continue to develop that. As we’ve talked publicly, we approve our budget with the board in December and we give guidance in January, and that’s going to continue to be the case for 2027.

If you look at past years, I think we’ve proven adept at getting costs out. These things take time. Some of them could pivot quickly. But other larger initiatives like for example, several years ago we did a $2 billion fixed cost reduction program that was very successful over that time period too.

So, we’re continuing to go to work. We’re working at those— looking at those plans. And as we’ve said repeatedly, we’re committed to grow earnings every year. And that’s what we’re going to be working towards the best we can.

Emmanuel Rosner, Analyst Wolfe Research: Okay. That’s helpful. And then one quick follow-up on the improvement in this year’s free cash flow guidance. I appreciate the buckets that make this up. Any way to quantify for us the piece around the IEEPA refund that’s now in the— assumed in the full year free cash flow?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Well, so we announced there’s a $500 million credit that we took to earnings. We’ve gotten probably about 60% of that back to date. And then I would say roughly a similar amount from the supply base that we expect to get before the end of the year as well. So call it $600 to $800 million this year. But, that’ll continue to come in as we go through the remainder of this year.

Emmanuel Rosner, Analyst Wolfe Research: Got it.

Thank you.

OPERATOR: Thank you. Our next question comes from Michael Ward with Citigroup. Your line is open.

Michael Ward, Analyst Citigroup: Thanks very much. Good morning, everyone. Just to follow up on the $20 billion share repurchase, is that— it looks like that’s what you spent the last 3 years, $20 billion and share repurchase. Is that number more of a timing or just an opportunistic— to give you the flexibility to be more optimistic? I mean, at current trading levels and those sorts of things.

Mary Barra, Chair and CEO, General Motors Company: Mike, we’re going to follow the— follow our capital allocation framework of bringing the business— reinvesting in the business to generate a 20% return on invested capital, maintaining an investment-grade Balance sheet. And as we’ve done now for several years, return the rest to our owners, our shareholders.

And so I think this is what we’re really trying to signal is we believe the company’s undervalued. And so we think this is the best way to provide value for our shareholders because of it.

And we’re not— as Paul already indicated, we’re not going to put a specific timeline on it. We’ll be opportunistic as we’ve been over the last several years. But I think the signal you should take from the size of it is that it reflects our board’s commitment to return cash to shareholders when we believe the shares are undervalued.

Michael Ward, Analyst Citigroup: Okay. And then on the financing front, you’ve stepped back leasing over the last few years. Is that a lever you’re looking to pull, or is subsidized interest rates What are some of the things that you can pull on GMF as far as trying to make vehicles a little more affordable if that’s something that’s needed in the marketplace? Will you push back leasing more or Well, what is your long— what are your long-term goals with GM Financial and what they can do?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Mike. And Susan’s on the line too. I can start, turn it over to her. But, we’ve obviously seen over the last few years a lot of EV leasing. And there was a lot of investment made there to help socialize that, help drive demand and also structurally superior with the consumer tax credits and a lot of cases.

So, I think the organization is pivoting. We’re still very much committed to GMF. And when you look at loyalty, when you look at availability for financing options for the customer, It’s a great way to serve that.

And as we continue to look for ways to grow GMF with GM Insurance, and there’s really interesting ties that we can do with the GM Rewards program, It’s obviously a big lever in terms of helping to create value for consumers in different ways than just producing vehicles.

Susan, happy to let you add.

Susan Sheffield, President and CEO, GM Financial, General Motors Company: Yeah, I mean, I think you addressed it. We’re here to support GM and moving vehicles, and it’s about discipline on incentive spend.

Yeah, really don’t have anything else to add. Thanks.

Michael Ward, Analyst Citigroup: Okay. Is it a concerted effort to scale back leasing or is that something, a lever you can pull as you go forward?

Paul Jacobson, Executive Vice President and CFO, General Motors Company: I would say, Mike, it’s a balance between it certainly is a lever, and I would like to see us probably do more leasing, but it’s also a lever against the incentive spend incentive environment that we’re in and how do we use our incentive dollars.

I think our go-to-market strategy has evolved over the last several years, and it’s clearly been a competitive advantage for us. And, we’ve got to use those dollars where we can, and sometimes that changes from time to time as consumer needs change, and we’ll be responsive to where the customer is.

Michael Ward, Analyst Citigroup: Perfect.

Thank you very much.

OPERATOR: Thank you. Our next question comes from Alex Perry with Bank of America. Your line is open.

Alex Perry, Analyst Bank of America: Hi. Thanks for taking my questions here. I just wanted to follow up with— on price. So I guess how should we think about the pricing, potential pricing benefit next year compared to the last major redesign of the full-size trucks. I think in 2019 you saw very strong price realization. What are the puts and takes of sort of using that as a case study for thinking about some of the pricing benefits next year? Thanks.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Yeah. Hey, Alex. Thanks for the call. We’ve been cautious to make sure that we’re not using historical heuristic models on pricing for this generation of trucks.

And the main difference is the current generation, the model year ’26s, are performing better than any trucks— really any vehicle program has in its last year of production. So the historical step function improvements that you’ve seen aren’t going to be there as pronounced.

That being said, we should benefit from a mix benefit as we tend to produce a bit of a rich mix out of the gate as we’re scaling up. And that should ultimately average out over time. But just caution you against using some of the 2018 2019 data? Because the current pricing environment is very different than what it was back then.

Alex Perry, Analyst Bank of America: Really helpful. And then my follow-up question was just on input costs, I guess. As we think about the impact of higher fuel prices, I guess what specific impact is higher diesel having on the supply chain with some of the fuel surcharges we’ve been hearing about? And I guess also on end-customer demand for some of your heavy-duty platforms. Thanks.

Mary Barra, Chair and CEO, General Motors Company: Yeah, I would say it’s early with the spike that’s just happened in diesel, and we’ll see what happens to it. But throughout the year, our diesels are so efficient that even with the higher prices before this last spike, they were more fuel efficient. So cost of ownership was lower than buying a hybrid truck.

So I think we’ve seen demand. We’re watching it closely. I think a lot’s going to happen of how long people perceive that the prices are going to be there. I think I’m excited about the new engines that we have coming because not only are they going to improve performance, across the board, they also are going to drive efficiency.

So, again, it’s too soon to tell if the diesel prices remain at this high level. But, up until a month or 2 ago, we weren’t really seeing an impact and we were still seeing strong demand.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: And Alex, on the logistics front, it comes in pretty quickly, as you’ve seen, maybe a 2 to 4 week lag. But we see it hit pretty quickly. And that’s been a sizable component of the $400 million of pressure that we called out in the prepared remarks.

Alex Perry, Analyst Bank of America: That’s incredibly helpful. Best of luck going forward.

Paul Jacobson, Executive Vice President and CFO, General Motors Company: Thank you again.

OPERATOR: Thank you. Our next question comes from Tom Narayan with RBC Capital Markets. Your line is open.

Tom Narayan, Analyst RBC Capital Markets: Hey, yes, thanks for taking the questions. The first one’s on the competitive pressures into 2027 and the potential impacts on volume and pricing.

You have a Detroit 3 peer with elevated dealer inventories, especially at its pickup truck. And we’re seeing incentives pick up there. We saw Japanese OEMs to be taking up share, especially with hybrids. I know you just said that’s not really where you play.

But you also have European OEMs getting squeezed out in Europe and China because competition from Chinese OEMs, and they’re talking about coming into the U.S. aggressively at their investor events. I mean, is this all just kind of par for the course or something you’re concerned about?

Mary Barra, Chair and CEO, General Motors Company: Well, if you think about when we saw the semiconductor shortage a few years back, we saw— and everyone was limited of how many vehicles they could build because of the allocations of semiconductors. We saw everybody pushing that limited supply to the United States because of the profitability of this market. So I don’t think it’s anything new.

I think we’re well positioned because of the overall strength of our portfolio and the fact that we’ve got a new truck coming out that takes performance across all aspects to the next level. Right now, in most of the products we build, we’re capacity constrained. We’re building as many as we can from a truck, SUV. I mentioned earlier the Equinox. We can’t build enough of them. We’ll be relieving that as we launch the opportunity to build that in the United States.

But I think that kind of competition is going to be here to stay. Specifically from a truck perspective, we’ve seen one of our competitors tend to have higher incentives for quite some time now. It goes up and down, but it’s been years. And, we’re still— we grew share with this truck and we think we have a huge opportunity to as we launch, get past the launch, continue to grow share based on the strength of our product. And when we do that, it also gives us the opportunity to continue to grow the OnStar and Super Cruise revenue.

So again, I think you’re accurate in what you’re seeing. I think we’re well positioned because of the strength of our portfolio, and we’ve seen it before and have the proof points that we continue to do well.

Tom Narayan, Analyst RBC Capital Markets: Got it. It’s a good segue on the Super Cruise to my next question. You guys are confident on Level 3 for 2028. There’s a couple of German OEMs who tried Level 3 and kind of didn’t go as well. I think they had some limited consumer demand. Part of that was just their ODDs were limited.

I suspect you guys are different. And so just curious to hear kind of why— how you were able to just get better— a better service than maybe what they have had on their Level 3 and what makes you more confident in achieving the consumer demand there.

Mary Barra, Chair and CEO, General Motors Company: Well, I think when we get to end ’28, when we launch the Escalade IQ, it will be the first. And we’ll talk more about that tomorrow in the GM-Ford event that we have. Our highway autonomous driving will be for highways and it won’t have limited ODDs. It will also carry with it the same focus we have on safety that I think everyone and customers have seen and trust and therefore use from a Super Cruise perspective.

So I think they will see a very capable product. I was just in the vehicle within the last month and from a couple months ago when I was in, it was dramatic how confident the vehicle is on highway speeds, etc.

So I feel very good about the product that we’re going to be launching. We’ll have more to talk about it tomorrow. And I think it will— customers will use it and want to pay for it because it will definitely improve their lives and the amount that they’re going to be able to use it.

Tom Narayan, Analyst RBC Capital Markets: Got it.

Closing Remarks

OPERATOR: Thank you. And at this time, I’d like to turn the call back to Mary Barra for her closing comments.

Mary Barra, Chair and CEO, General Motors Company: Great. Well, thank you.

And thanks, everybody, for your questions. As we discussed today, GM is performing very well. That hasn’t changed. While inflation continues to be uncertain, we are working hard to continue our momentum and generate significant cash returns for our shareholders.

We are making the core business stronger with strategic investments in new products, new technologies, and through improved quality and operating efficiency.

And we have raised full-year guidance twice this year while offsetting higher commodity logistics and other costs outside of our control.

As we move forward over the next several years, our product portfolio will only get stronger as we complete the launches of the Silverado and Sierra light-duty pickups and then follow them with our next-generation heavy-duty pickups and our next-generation full-size SUVs, all-new Cadillac sedans and crossovers, and more. So I think you can see we’ve got a lot coming.

At the same time, we’ll be expanding our capabilities in autonomous technology for highway, starting with the Cadillac Escalade IQ in ’28, as I just discussed, developing cutting-edge battery technology like LMR that will help improve our EV profitability and building even stronger relationships with customers through our digital experience.

We think this is a proven strategy for creating even greater shareholder value as we move forward, and we look forward to delivering. So thank you for joining us today, and I hope everyone has a great day.

OPERATOR: That concludes the conference call for today. Thank you for joining.

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