General Motors has already increased full-size truck production at one of its U.S. plants and there are more production shifts to come as the automaker works to mitigate the cost of tariffs on imported vehicles and parts.

GM added an additional 50,000 full-size trucks a year at its Ford Wayne, Indiana, plant, that was already operating on three shifts. There is excess capacity in other plants that can be leveraged, GM CEO Mary Barra told investors on a call to discuss first-quarter earnings, to lessen dependence near-term on plants in Mexico.

The financial results were released earlier this week, but GM delayed its call with analysts to gain better clarity on the Trump Administration’s latest changes to its tariff policies as they apply to the automotive industry.

The latest White House plan still imposes a 25 percent tariff on imported vehicles but automakers who assemble vehicles in the U.S. can apply for a 3.75 percent offset. To qualify to get the money back—and essentially be semi-tariff-free for a year—a U.S.-made vehicle must have 85 percent U.S. content or comply with the USMCA trade agreement. Companies must pay the tariff up front and apply for the offset to wipe it out. The latest change takes a bad situation and makes it slightly less worse, said Cox Automotive chief economist Jonathan Smoke.

Confusion in the wake of ever-changing announcements led GM to release its financial earnings on April 29 without any guidance. Two days later, with a better idea of the latest tariff policy, GM says it now expects pretax profits of $10 billion to $12.5 billion, down about $3.5 billion because it includes a tariff exposure of $4 billion to $5 billion.

Self-Help Actions to Mitigate the Pain of Tariffs

GM will take actions to offset at least 30 percent of its exposure to tariffs. Barra said these “self-help” actions are designed to add U.S. content. Steps include adding volume at the Fort Wayne plan.

“As tariff policy came into focus, we increased full-size pickup truck production at our facility in Fort Wayne, which was already running three shifts by about 50,000 trucks a year. We are developing plans to further increase U.S. vehicle production,” Barra said. There is excess capacity in some plants that can be leveraged. There are a lot of levers GM can pull but there is more work to be done before announcements can be made, she says.

More U.S. Content

GM is also working with its suppliers to build more parts in the U.S. where possible and comply with the USMCA trade agreement. Production of U.S.-assembled battery modules is a low-cost way to increase U.S. content. GM is the largest battery cell manufacturer in the U.S. with joint-venture plants in Ohio and Tennessee. Building the modules as well as the cells increases domestic content. Currently the content in U.S.-assembled GM vehicles is more than 80 percent USMCA-compliant, Barra says. And the automaker has reduced how much it spends on materials from China for U.S. production to less than three percent.

Another action is adding discipline to control discretionary spending and reduce overall cost, but the automaker says it will be careful not to cut too deeply, said chief financial officer Paul Jacobson.

Impact on Car Prices

With these actions, pricing should remain consistent for the rest of the year, despite the higher cost of the tariffs, Barra says.

Smoke at Cox Automotive said car prices have been going up since the threat of tariffs and will continue to do so when the tax hits consumers who are already wary. They will quickly reach a point where consumers will not buy a vehicle at any price. The situation is worse than during Covid when there was stimulus spending, better financing and lower interest rates.

While most automakers are committing to holding the line on pricing, they mean the sticker price, not the actual price paid. At the dealership level consumers will find fewer deals, discounts, or favorable financing. Listing prices have increased every week, Smoke said during a video conference organized by the Automotive Press Association. People who bought a car in April paid more than people who bought in March. And tariffs mean higher costs for repair and service, as well as car insurance rates which he says will go skyward.

Selling What Customers Want

GM will continue to invest in products and tailor production to the vehicles that consumers want. That includes vehicles with internal combustion engines, like the Cadillac XT5 which will extend production at the Spring Hill assembly plant in Tennessee through the end of 2026.

Electric vehicle production is being moderated to meet slower demand without resorting to heavy discounts. This will affect scale, which means more work to reduce cost instead of portfolio expansion, Barra said. The deal to sell GM’s share of a third Ultium battery cell plant in Lansing to LG Energy Solutions will allow GM to recoup that capital investment.

Software and Tech

Another focus is on automated driving systems and software defined vehicles.

The Cruise autonomous driving unit has been integrated into GM and the team will keep adding features to the Super Cruise hands-free driving assistance system as GM works towards reaching Level 3 autonomous driving. Barra promised more detail on timing later this year.

Work also continues on the next-generation software-defined vehicle. Software development and validation have improved the simplicity of the software and allowed GM to dramatically increase the quality and speed of additional services. GM is on its way to launching its next-gen SDV, Barra says, promising more information later this year.

This comes as Reuters reports Ford has killed its program to develop next-generation electrical architecture for a fully-networked vehicle that streamlines software functions in electric as well as ICE vehicles. Costs and delays were cited as the reason. The work to date will be absorbed into the current software system, according to Ford. The abandoned project was a zonal system with a central brain connected to other brains in the vehicle. Rivian has developed a zonal architecture that is it sharing with Volkswagen in a joint venture.