10:44 AM EDT, 10/21/2025 (MT Newswires) -- General Motors ( GM ) lifted its full-year earnings outlook and lowered expected tariff headwinds on Tuesday, as the automaker's third-quarter results topped market estimates.

The company now anticipates adjusted earnings to come in between $9.75 and $10.50 per share for 2025, up from its previous guidance of $8.25 to $10. The current consensus on FactSet is for non-GAAP EPS of $9.46. The automaker also upgraded its adjusted automotive free cash flow forecast.

"This increase reflects our confidence in our underlying business performance and also incorporates (President Donald Trump's) administration's recently approved expansion of the (manufacturer's suggested retail price) tariff offset," Chief Financial Officer Paul Jacobson said during an earnings call, according to a FactSet transcript.

Automakers can apply for a 3.75% credit of the manufacturer's suggested retail price for US-assembled vehicles through 2030 to offset import tariffs on parts. Trump also extended the 3.75% credit for US medium- and heavy-duty vehicle production, Reuters recently reported.

The expansion of the MSRP tariff offset lowered GM's tariff exposure for the current year, to between $3.5 billion and $4.5 billion from $4 billion to $5 billion previously expected, Jacobson said on the call. The company aims to offset around 35% of this gross tariff impact through cost and footprint initiatives, the CFO added.

"The MSRP offset program will help make US-produced vehicles more competitive over the next five years, and GM is very well positioned as we invest to increase our already significant domestic sourcing and manufacturing footprint," Chief Executive Mary Barra said in a shareholder letter.

GM's shares climbed 14% in Tuesday trade, gaining 24% so far this year.

The automaker posted adjusted EPS of $2.80 for the September quarter, down from $2.96 the year before, but better than the Street's view for a larger decline to $2.29. Revenue dipped 0.3% to $48.59 billion, but came in ahead of the average analyst estimate of $45.04 billion.

Revenue in North America decreased to $40.55 billion from $41.16 billion in the 2024 quarter, while international sales advanced to $3.65 billion from $3.52 billion. Consolidated vehicles sales rose to 1.56 million units from 1.48 million last year, with sales in the US market rising to 710,000 vehicles from 660,000.

GM is reassessing its electric vehicle manufacturing footprint amid an evolving "regulatory framework and the end of federal consumer incentives," Barra said in the letter. "It is now clear that near-term EV adoption will be lower than planned," the CEO said.

"We expect to reduce EV losses in 2026 and beyond, making us much better positioned as demand stabilizes," Barra said on the call. "EVs remain our North star, so we will continue to invest in new battery chemistries like (lithium manganese-rich)."

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