by GM faces financial difficulties due to tariffs and changes in the automotive industry
General Motors (GM) reported losses of $1.1 billion due to tariffs imposed by former US President Donald Trump. Although the company surpassed Wall Street expectations, its second-quarter profit fell from $2.9 billion to $1.9 billion compared to last year. This creates additional pressure on the company’s financial condition.
GM CEO Mary Barra stated that the company is focusing on automating production processes to improve efficiency but does not plan to follow Tesla’s path in artificial intelligence (AI) and autonomous vehicles.
“We are focused on what will help optimize production,” Barra said.
Analysts doubt GM’s strategy
Piper Sandler analysts expressed concerns about GM’s future, as the company is not demonstrating the bold strategic changes needed to compete in the transition to electric vehicles. Unlike Tesla, which is actively investing in AI and robotics, GM is choosing a more cautious approach. However, it is this aggressive strategy of Tesla that allows it to receive a high market valuation.
The question of whether GM can achieve profitability in electric vehicle manufacturing remains open, especially given the difficulties even at Tesla. Some experts believe that traditional automakers need radical changes to survive in the new era of the automotive industry.
For now, GM continues to bet on production optimization, but whether this will be enough for long-term success is a question that remains without a clear answer. The company will have to find a balance between traditional methods and innovations to not fall behind competitors.
