General Motors (GM) closed out 2025 with a mixed financial report, revealing a company in transition. While global sales saw a modest increase and its operations in China returned to sustained profitability, the automaker’s bottom line was significantly impacted by a massive restructuring of its electric vehicle (EV) business and looming tariff pressures. As the company looks toward 2026, its ability to balance these headwinds with the momentum gained from its “localization” strategy in China will be critical to achieving its performance goals.
According to its 2025 financial report released on January 27th, GM reported full-year revenue of $185.019 billion, a slight year-on-year decrease of 1.3%. Adjusted earnings before interest and taxes (EBIT) came in at $12.747 billion, a sharper decline of 14.6% compared to the previous year. The primary culprit for this profit drop was a sweeping overhaul of its EV operations, which incurred total impairment charges of $7.6 billion over the second half of the year. These charges covered production line adjustments and settlements with suppliers as the company recalibrated its EV strategy.
Looking ahead, GM’s 2026 outlook reflects both caution and confidence. The company forecasts net profit between $10.3 billion and $11.7 billion, with adjusted EBIT expected to land between $13 billion and $15 billion. However, this guidance comes with a clear acknowledgment of significant challenges. GM anticipates an additional $3 billion to $4 billion in costs from tariffs, a $1 billion to $1.5 billion negative impact from commodity prices and exchange rates, and another $1 billion to $1.5 billion in expenses related to localizing production capacity. These headwinds are expected to be partially offset by a $1 billion to $1.5 billion narrowing of losses in its EV unit and a $550 million to $750 million boost from compliance revenues, as the company no longer needs to purchase emission allowances.
The Chinese Market: A Bright Spot Powered by Localization
A key pillar of GM’s resilience has been its performance in China, where a deliberate “localization” strategy appears to be paying dividends. In 2025, GM delivered 1.88 million vehicles in China, a year-on-year increase of 2.23%. More importantly, the company stated it has now achieved profitability in the Chinese market for five consecutive quarters. This turnaround is supported by strong performances from its key joint ventures, SAIC-GM and SAIC-GM-Wuling. SAIC-GM saw sales jump 22.99% to 535,000 vehicles, while SAIC-GM-Wuling sold over 1.6 million vehicles, a 20.52% increase. The recovery was further underscored by record-breaking new energy vehicle (NEV) sales, which approached 1 million units and accounted for more than half of total sales volume.
This resurgence can be directly traced to a strategic shift initiated in mid-2024. In June of that year, GM veteran Dan Ammann was appointed President of GM China, swiftly followed by significant personnel changes at SAIC-GM. The appointments of Lu Xiao as General Manager and Xue Haitao as Deputy General Manager of marketing, alongside giving the Chinese team greater decision-making authority, empowered the local operation to move with unprecedented speed.
The results of this empowered localization were most visible at the Buick brand. In 2025, Buick pioneered a “fixed-price” strategy for its NEVs, eliminating traditional dealer negotiations. It also launched its high-end NEV sub-brand, Buick Electra, built on the new “Xiaoyao” super-integrated architecture. This platform proved its agility when the new GL8 Avenir plug-in hybrid was developed and upgraded in just 16 months—a stark contrast to the previous 36-month iteration cycle. Following this, the Buick Electra E5 mid-to-large sedan, featuring a 1.5T extended-range system and Momenta-powered intelligent driving, was launched in September and quickly gained traction, with cumulative sales of over 6,200 units in the final two months of the year. The success of this strategy solidified Buick’s MPV family, which saw annual terminal sales exceed 122,000 units, a 17% increase, with NEV versions accounting for over half of that volume.
The localization push also extends to SAIC-GM-Wuling, which deepened its partnership with Huawei. In early 2026, the jointly developed Huajing S experience car rolled off the production line, integrating Huawei’s technologies in intelligent driving and cockpits.
Driving Down EV Costs Through Technology and Partnerships
Beyond product development, GM is aggressively working to reduce EV costs through technological innovation. In partnership with LG Energy Solution, GM is developing a new lithium-manganese-rich (LMR) battery cell, targeting a 2028 debut in pickups and SUVs with a range of over 400 miles at a significantly reduced cost. The same joint venture is also upgrading a plant in Tennessee to produce lower-cost lithium-iron-phosphate (LFP) batteries, which eliminate expensive materials like cobalt. To bridge the gap until its own LFP production comes online in 2027, GM is sourcing batteries from Contemporary Amperex Technology Co. Ltd. (CATL) for its next-generation Chevrolet Bolt.
Looking further ahead, GM plans to launch a second-generation software-defined vehicle architecture in 2028 that will integrate all key vehicle systems into a high-speed computing core, promising further efficiencies across both its fuel and electric lineups.
In China, this cost and technology push is being spearheaded by SAIC-GM, which has committed to launching over 10 new energy products through 2026, covering pure electric, plug-in hybrid, and extended-range technologies. Simultaneously, the joint venture is pursuing an “intelligent transformation” of its fuel vehicles, aiming to offer high-level intelligent driving and AI cockpits to maintain competitiveness in the traditional market segment through 2027.
