General Motors Q1 FY26 earnings call GM

GM delivered a strong Q1 in North America with a 10.1% EBIT adjusted margin, benefiting from a 1.5 point tariff adjustment, netting to 8.6%. The company maintained leadership in U.S. full-size pickup sales with a 42% market share and was #1 in fleet sales. GM's crossover business has grown significantly, now representing over 46% of sales, up from just over 40% in 2023, contributing to profitability. Despite lean inventory and planned downtime for next-gen full-size pickups, GM's disciplined approach to pricing and incentives supported its performance.

The OnStar digital services business is gaining significant traction, with recognized revenue exceeding $750 million in Q1, a 20% year-over-year increase. Super Cruise is scaling rapidly, with customers driving 1 billion hands-free miles and subscriptions on track to surpass 850,000 by year-end, demonstrating strong renewal trends in the 30% to 40% range. This ecosystem, including a deferred revenue balance of $5.8 billion (up over 50% YoY), is seen as a key driver for future high-margin recurring revenue, with 13 million subscribers targeted by end of 2026.

GM incurred an additional $1.1 billion in EV charges in Q1, primarily due to contract cancellations and supplier commercial claims, with $1 billion expected to be cash impact. These charges follow $7.6 billion in EV-related charges in the second half of 2025. The company is actively working to finalize these claims, having already recorded around 90% of expected supplier costs, and is rightsizing its battery supply chain to improve EV profitability and scale as market adoption grows, albeit at a slower pace.

The war in Iran has introduced cost pressures, particularly for logistics and commodities, leading GM to raise its full-year commodity inflation guidance by $500 million to $1.5 billion-$2 billion. In response, GM is implementing cost management strategies, including deferring hiring and seeking efficiencies across the business. The company maintains a prudent approach to guidance given the ongoing uncertainty, while proactively planning for a range of potential outcomes.

GM started Q2 with approximately 47 days of supply on dealer lots, indicating lean inventory, especially for full-size pickups. The company aims to increase inventory levels for key products over the coming quarters, while remaining disciplined on incentives and mindful of broader demand. Planned downtime for next-gen full-size pickups in Q1 is largely complete, with the ramp-up expected to begin in Q3 and accelerate into Q4, with minimal anticipated impact on full-year volumes.

GM achieved its sixth consecutive profitable quarter in China, with $100 million in equity income (excluding plant sale gain), demonstrating resilience despite softer macroeconomic conditions. GM International (excluding China) delivered $40 million in EBIT adjusted, partially impacted by the Iran conflict, which led to the reallocation of approximately 7,500 full-size SUVs from the Middle East to North America to alleviate domestic inventory shortages.