General Motors (GM) anticipates that the impact of tariffs will be less severe than previously expected and has raised its full-year adjusted earnings forecast, following third-quarter results that surpassed Wall Street expectations. On Tuesday, GM's stock soared over 9% in pre-market trading. The automaker has lowered its expected range for the total impact of tariffs this year to between $3.5 billion and $4.5 billion, down from the previous guidance of $4 billion to $5 billion. GM expects that its tariff mitigation measures will offset approximately 35% of the tariff impact due to a reduction in the tariff base. Last Friday, President Donald Trump provided additional tariff relief on auto parts for domestic automobile manufacturers, extending a rebate policy originally intended for a short period until 2030. This announcement is part of Trump's directive signed on Friday, which officially sets a 25% import tariff on medium and heavy trucks starting November 1. This move reflects the Trump administration's dual efforts to bolster U.S. manufacturing through tariffs while also seeking to protect the automotive industry. Trump's tariff policies have previously led to increases in costs for auto parts and raw materials, placing pressure on the industry. "The manufacturer's suggested retail price (MSRP) offset program will help enhance the competitiveness of domestically produced vehicles in the U.S. over the next five years. GM is in a very favorable position as it continues to invest in increasing its domestic sourcing and expanding production capacity," said GM CEO Mary Barra in a letter to shareholders. GM previously announced it would invest $4 billion in capital for production facilities in Tennessee, Kansas, and Michigan over the next two years. Barra indicated that once these investments are in place, the company plans to achieve an annual production of over 2 million vehicles in the U.S. Additionally, GM will invest nearly $1 billion to develop a new generation of advanced fuel-efficient V8 engines in New York. In the third quarter ended September 30, GM reported a net income of $1.33 billion, or earnings per share of $1.35; this compares to a net income of $3.06 billion, or earnings per share of $2.68, during the same period last year. Excluding one-time gains and costs, GM’s adjusted earnings per share for the third quarter was $2.80, significantly exceeding the $2.28 forecast from analysts surveyed by Zacks Investment Research. Total revenue for the third quarter reached $48.59 billion, also surpassing the Wall Street expectation of $44.27 billion. Currently, GM has raised its full-year adjusted earnings per share forecast to a range of $9.75 to $10.50, up from a prior expectation of $8.25 to $10. Analysts surveyed by FactSet project the company's earnings per share for the year will be $9.46. On Tuesday, Barra also mentioned that GM is reassessing its production capacity and layout for electric vehicles (EVs). A week ago, GM announced it expects a $1.6 billion negative impact in the third quarter due to the U.S. government's cuts to electric vehicle tax credits and the relaxation of emissions regulations. The U.S. electric vehicle tax credit program ended last month, which previously allowed new electric vehicles to qualify for a rebate of $7,500 and up to $4,000 for used electric vehicles. "With the evolving regulatory framework and the termination of federal consumer incentive policies, it is clear that electric vehicle adoption will fall short of initial plans in the short term," Barra stated in her letter to shareholders. Barra indicated that in addition to the confirmed expenditures for the third quarter, the company expects to incur additional costs in the future. "By taking swift and decisive action to address the oversupply issue, we anticipate reducing losses in our electric vehicle business by 2026 and beyond," she stated. GM remains committed to its electric vehicle initiatives for the Cadillac, Chevrolet, and GMC brands. Barra added that even with a shrinking market, the company still expects improved performance for its electric vehicles across these brands.