On the Dash:
- GM raised full-year EBIT-adjusted guidance to $14 billion-$16 billion, the second increase this year.
- Net income fell 31% on a $2.3 billion EV strategic realignment charge.
- GM Financial delinquencies rose to 3.4% of the retail portfolio, up from 2.9% a year ago.
General Motors (GM) raised its full-year 2026 guidance for the second time this year, even as a major EV-related charge pulled net income down in the second quarter. The results point to a stronger core business than the headline profit number suggests, and dealers should pay attention to both sides of the story.
While GM reported Q2 revenue of $48 billion, up 1.9% from a year ago, net income attributable to stockholders fell to $1.3 billion, down 31.1% year over year. EBIT-adjusted, the metric GM uses to track core operating performance, rose 29.8% to $3.9 billion.
The gap between those two numbers comes down to the automaker taking a $2.3 billion charge tied to the realignment of its EV manufacturing footprint this quarter, on top of $177 million in China restructuring costs. Those charges hit GAAP net income directly but get excluded from EBIT-adjusted, which is why the two metrics moved in opposite directions.
GM North America drove the improvement, as the segment posted EBIT-adjusted of $3.4 billion, up 42.7% year over year, with margin expanding to 8.6% from 6.1%. Additionally, adjusted automotive free cash flow nearly doubled to $5 billion for the quarter.
Guidance raised again
GM now expects full-year EBIT-adjusted of $14 billion to $16 billion, up from its prior range of $13.5 billion to $15.5 billion. Adjusted automotive free cash flow guidance moved to $9.5 billion-$11.5 billion, and EPS-diluted-adjusted guidance rose to $12.00-$14.00. The board also declared a quarterly dividend of $0.18 per share, payable September 17 to shareholders of record as of September 4.
In her letter to shareholders, GM Chair and CEO Mary Barra credited the North America margin gains to lower warranty costs, reduced EV losses and improved operating efficiency. She pointed to steady pickup and SUV demand and record Super Cruise adoption as the drivers behind the quarter.
“We are building from a position of strength with a proven track record of execution,” Barra said.
Where the pressure showed up
U.S. market share slipped to 16.6% for the quarter, down from 17.4% a year ago. Total North America volume fell to 848,000 units from 878,000. Fleet sales made up a larger share of the mix, climbing to 22.3% of total volume from 17.8%, a trend that tends to compress per-unit profitability even as overall numbers improve.
China remained a modest bright spot as equity income from GM’s Automotive China joint ventures rose to $83 million for the quarter, even as GM’s China market share declined to 6.6% from 6.8% amid a shrinking overall industry.
GM Financial: originations up, credit quality softening
GM Financial, the automaker’s captive finance arm, reported net income of $432 million for the quarter, down from $510 million a year ago. Six-month net income came in at $946 million, down from $1 billion over the same period in 2025.
Total originations were $14.2 billion, down from $14.9 billion. Retail loan originations actually grew to $10 billion from $9.5 billion, but lease originations dropped sharply to $4.1 billion from $5.4 billion, and that decline drove the overall total lower.
The more notable trend for dealers is what’s happening with credit performance. Delinquencies on the retail portfolio rose across every bucket the company tracks. Accounts 31-60 days past due climbed to 2.4% from 2.1% a year ago, and accounts more than 60 days past due rose to 1.0% from 0.8%. Annualized net charge-offs increased to 1.3% of average retail receivables, up from 1.1%.
That’s a consistent quarter-over-quarter softening in how GM Financial’s retail borrowers are performing, and it’s worth watching heading into the back half of the year given its implications for F&I underwriting and reserve levels across the industry.
GM Financial closed the quarter with $33.3 billion in available liquidity, including $24 billion in secured credit facility capacity.
