Auto makers report record revenue but warn of rising costs

General Motors expects rising material and fuel costs to cost the company up to $2 billion this year. This projection reflects a wider trend across the U.S. auto industry, where strong sales are colliding with higher production expenses.

The Detroit Three reported third-quarter earnings on October 29. While revenues increased for all three companies, executives warned investors about the growing price of steel, copper, and computer chips. General Motors saw a 2.9% rise in revenue. Ford reported a 2% increase. Stellantis posted a 1% gain. These gains were driven largely by robust demand for light-duty trucks.

Stellantis reported that its pickup sales in the United States rose 34% over the past year. General Motors light-duty truck sales climbed 9%. Ford continues to sell its F-Series trucks at high volume. Sherry Ann House, Ford's chief financial officer, stated that customers remain resilient despite high fuel prices and inflation. The average new vehicle transaction price reached just over $50,000 in September, near a record high.

Higher input costs are eroding those profits. Since 2025, tariffs have raised the price of imported steel, aluminum, and copper. Copper is essential for wiring and electric vehicle batteries. Its price has risen due to global demand from data centers and the energy sector. Computer memory chips are also more expensive because of a tight supply chain and demand from the artificial intelligence industry.

Logistics costs have added another layer of expense. The average price for a gallon of diesel fuel has hovered around $6.35. This high fuel cost impacts the transportation of parts between the United States and Canada, where supply chains are tightly intertwined. Paul Jacobson, General Motors' chief financial officer, noted that the company is still paying about $2.5 billion in tariff costs. He said these costs were lower than earlier forecasts due to tariff refunds.

Electric vehicle sales have slowed following the expiration of the $7,500 federal tax credit on September 30, 2025. Tesla reported that its global sales fell during the quarter. General Motors said its third-quarter sales dropped 6% partly because of a smaller electric vehicle market. However, hybrid vehicle sales have increased. Edmunds data shows hybrid sales are up 27% in the past year.

Tesla has regained ground in the electric vehicle market. The company now accounts for almost 52% of new electric vehicle sales in the United States. Ivan Drury, director of industry insights at Edmunds, said many buyers are defaulting to Tesla as other automakers adjust their strategies. Elon Musk, Tesla's chief executive, indicated that the company is focusing heavily on robotaxis and humanoid robots. He also hinted at a potential merger with SpaceX, saying special committees are discussing the move.

Stellantis executives said they would provide more details on specific cost impacts in the fourth quarter. Sam Fiorani, a vice president at Auto Forecast Solutions, described the industry as moving at a glacial pace. He said that disruptions like tariffs throw off the calculations for profit and loss. Automakers are now adjusting their product plans to include more hybrid vehicles.