General Motors shares jumped Tuesday after the company projected a significant rebound in earnings by 2026, alongside a $6 billion stock buyback plan. The move signals confidence in the automaker’s near-term financial outlook, despite recent setbacks in its electric vehicle (EV) ambitions.
Financial Performance: A Mixed Picture
GM reported $2.7 billion in profits for the previous year, a notable decline from the $6 billion earned in 2024. This downturn was largely driven by $7.6 billion in losses tied to scaling back its EV strategy, including write-downs on factory investments and reduced production of electric cars. The shift reflects a broader industry trend where EV demand has yet to fully materialize as quickly as initially anticipated, forcing automakers to reassess their timelines and investments.
2026 Projections: Gas Vehicles Lead the Way
However, GM anticipates a substantial recovery in 2026, forecasting profits between $10.3 billion and $11.7 billion. This increase hinges heavily on rising sales of high-margin gasoline-powered trucks and SUVs, indicating a strategic pivot back toward traditional, profitable vehicle segments. To further incentivize investors, GM also announced a 20% dividend increase, raising the quarterly payout to 18 cents per share.
Regulatory Tailwinds & Production Shifts
According to CEO Mary T. Barra, the company is benefiting from a U.S. policy environment that favors internal-combustion vehicle demand. This allows GM to bring more production onshore to meet strong customer interest in gasoline-powered models. This adjustment highlights the complex interplay between automotive strategy, consumer preferences, and evolving regulatory pressures.
GM shares rose by approximately 8% on Tuesday morning, underscoring investor approval of the company’s revised approach. The stock surge reflects a growing sentiment that GM is adapting to market realities by prioritizing current demand while adjusting its long-term EV plans.
Ultimately, GM’s strong 2026 outlook suggests a pragmatic shift toward maximizing profits in the short term by leveraging its existing strengths in gas vehicles, rather than solely relying on a potentially slower EV transition.
