General Motors’ Q2 2025 net income slid 35% to $1.89 billion after President Donald Trump’s new 25% automotive tariffs carved a $1.1 billion hole in the automaker’s bottom line. The results, released July 22, mark the first full quarter in which the duties meaningfully hit earnings, setting off alarms for collision repair shops already battling parts inflation and extended cycle times.
Quarterly revenue dipped to $47.1 billion, while earnings before interest and taxes fell 32% to $3.04 billion, even as U.S. unit sales grew 7% on strong light truck demand. GM warned the tariff bill will climb in the second half as imports from Mexico, Canada and South Korea continue.
Tariff Bill Comes Due
The Center for Automotive Research estimates the 25% levies will add an average $4,911 in cost for every Detroit Three vehicle assembled with imported parts, and up to $8,600 for a fully imported unit. For collision repairers, those extra dollars show up in higher list prices for bumpers, headlamps and structural components sourced from the same global supply chains now taxed at the border.
The company still expects total 2025 tariff costs of $4 billion to $5 billion but has “limited appetite” to pass those expenses to retail prices in the near term. By absorbing the hit, GM preserves market share — but leaves vendor networks and, by extension, repair shops shouldering inflated parts acquisition costs.
Knock on Effects for Parts Pricing
Roughly 44% of OEM collision parts sold in the U.S. are manufactured abroad, according to marketplace data compiled by PartsTrader. The 25% duty reaches sheet metal, ADAS sensors and aftermarket lighting, items that together represent eight of the 13.5 average replacement parts on a typical estimate. PartsTrader calculates tariffs alone could lift the parts line of an average repair order by $100.
Capacity Shift May Ease Some Pain
GM’s answer is a $4 billion, three plant expansion aimed at re localizing production of high volume SUVs and pickups now built overseas. Beginning in early 2027, Cadillac Escalade bodies and Chevrolet Blazer stampings will roll out of Tennessee and Michigan instead of Mexico, a move that could shorten parts lead times for shops that rely on those programs for profitable truck work.
However, implementation lags and tooling migrations mean at least 18 months of continued exposure. For now, dealers continue to back order imported trim and electronics, stretching key to key times and rental day bills.
“You’ll see some relief once domestic capacity ramps, but 2025 26 is going to be bumpy,” said Ryan Mandell, director of claims performance for Mitchell, speaking at a recent industry webinar.
