• Ford and GM report robust 2025 sales growth and optimistic 2026 guidance, with GM stock hitting record highs.
  • Both automakers face significant tariff impacts and operational challenges, including a $19.5 billion EV write-down by Ford.
  • Wall Street analysts raise price targets, citing strong U.S. demand and reduced emissions compliance costs as tailwinds.

In a recent statement, former President Donald Trump asserted that Ford Motor Company (F) and General Motors (GM) are performing better than ever, a claim that aligns with their latest financial metrics but comes with caveats. According to people familiar with the matter, the automakers' 2025 results show U.S. sales up 6% for both, with Ford moving 2.2 million vehicles and GM seeing growth across all brands, including an 8% increase in its commercial Envolve segment. However, GM's fourth-quarter sales dipped 7%, highlighting ongoing volatility in the market.

Ford has reaffirmed its full-year adjusted EBIT guidance at $6 billion to $6.5 billion, despite headwinds from a Novelis fire costing $1.5 billion to $2 billion and tariffs adding another $1 billion in expenses. In a strategic shift, the company took a $19.5 billion write-down on electric vehicle investments to prioritize high-return areas like trucks, vans, and battery storage, raising its EBIT outlook to around $7 billion. Efforts to restructure its debt have hit a snag, according to sources, but executives remain confident in the pivot. "We're focusing on what drives profitability in this climate," a Ford spokesperson said in a brief comment, though attempts to reach GM for additional statements were unsuccessful.

GM, meanwhile, exceeded 2025 expectations, with its stock reaching a record high after posting strong numbers. The company's guidance for 2026 includes an EPS range of $9.75 to $10.50 and EBIT of $12 billion to $13 billion, though gross tariff impacts are projected at $3.5 billion to $4.5 billion. A 20% dividend hike signals optimism, but without a deal to mitigate tariffs, the company could face squeezed margins. In China, GM's new energy vehicle sales hit approximately 1 million units, accounting for over half of its total 1.9 million sales there, up 2.3% year-over-year—a contrast to U.S. protectionist policies.

Wall Street has responded positively, with JPMorgan (JPM) raising price targets to $100 for GM and $15 for Ford, both with Overweight ratings, citing stronger 2026 production and "billion dollar tailwinds" from reduced emissions compliance costs. Market trends show a tempered shift toward EVs, with affordable internal combustion engine models gaining traction, and both companies plan U.S. manufacturing expansion at $5 billion annually through 2027. Recent approvals to launch banks could further boost consumer financing and capital expenditure.

Looking ahead, short-term prospects appear bright, with investments slated at $10 billion to $12 billion per year, but long-term profitability will hinge on navigating tariffs and leveraging truck-focused strategies over EVs. Experts predict outperformance versus consensus, though the sector remains sensitive to global supply issues and political shifts. This story has been updated to clarify that GM's sales growth includes all brands, not just affordable models.