GM blew past Q1 earnings, raised its full-year guidance, and got a $500 million tariff refund all in one morning. The stock fell 4%.
The reason it dropped is buried inside the same report. GM is still bleeding money on electric cars, and the bill keeps growing.
Adjusted earnings came in at $3.70 per share. That was well above the $2.62 Wall Street had expected. Revenue, though, landed at $43.62 billion, just under the $43.68 billion forecast.
The Supreme Court's February ruling against Trump's emergency tariffs gave GM a $500 million windfall. That benefit is part of $160 billion in expected refunds across US firms after the court struck down the levies in a 6-3 vote.
Strip out the tariff money and GM still beat estimates. Adjusted earnings would have been up about 7.5% from a year ago on the core business.
CFO Paul Jacobson said North America did the heavy lifting. The region's adjusted earnings rose 11.4% to $3.66 billion, as the team managed tight inventory and cut costs.
GM raised its 2026 adjusted earnings guidance by $500 million to a range of $13.5 billion to $15.5 billion. That works out to $11.50 to $13.50 per share.
The bump matches the tariff refund almost exactly. CEO Mary Barra told shareholders the quarter "surpassed our expectations." She pointed to "solid momentum" in the company's core business.
GM also expects gross tariff costs of $2.5 billion to $3.5 billion this year from levies that survived the court ruling. That's down from an earlier $3 billion to $4 billion forecast.
Here is where the cracks show. GM took $1.1 billion in special charges in Q1 tied to its EV pullback. That comes on top of $7.6 billion in EV-related charges last year.
That puts GM's total cost of dialing back its electric plan at roughly $8.7 billion and counting.
The company also lowered its full-year net income guidance to $9.9 billion to $11.4 billion as a result.
Operating cash flow guidance came down too, to a range of $16.8 billion to $20.8 billion. GM held its free cash flow forecast at $9 billion to $11 billion, citing doubt about when the tariff refund actually shows up.
There is a wrinkle on the refund itself. Trump told CNBC last week he would "remember" US firms that do not seek refunds for the tariffs, after the Supreme Court ruled the levies illegal.
GM booked the benefit anyway. CFO Jacobson said the company has not gotten the IEEPA refund cash yet. The firm still expects to get it and chose to record it during the first quarter.
The tariff refund cleaned up the headline. The EV write-downs are the trend.
GM's core business is doing well in North America. But the company is still paying for an electric plan it has been quietly stepping back from for two years.
The next test is whether the underlying 7.5% earnings growth holds up without one-time tariff money in the next quarter's print.
