General Motors beat economists’ Q2 earnings estimates, in part due to a 111% surge in EV sales.
The automaker recorded $3.04 billion in adjusted earnings before interest and taxes on Tuesday, a marked 31.6% decrease from last year’s Q2 $4.43 billion. Yet, GM beat StreetAccount estimates of $2.89 billion as the company’s electric-vehicle sales more than doubled in the second quarter, according to its earnings release. Chevrolet took the No. 2 spot in the U.S. EV market in Q2, behind Elon Musk’s Tesla.
On an investor call Tuesday, CEO Mary Barra attributed the EV sales growth to the company’s “very strategic EV portfolio,” which includes luxury EV leader Cadillac. But, experts tell Fortune a broader push by EV makers to offload inventory before consumer tax credits expire at the end of September has helped inflate EV sales for the past couple months.
“EV incentives were absolutely crazy” in the months leading up to the EV tax credit deadline, Aharon Horwitz, CEO of Fullpath, a customer data and experience platform for car dealerships, told Fortune.
The Inflation Reduction Act of 2022 gives EV buyers the chance to qualify for a clean vehicle tax credit of up to $7,500 for new EVs and $4,000 for used EVs purchased from 2023 to 2032. Eligibility depends on the buyers’ gross income and the tax credit amount depends on critical minerals and battery components requirements. But, the Trump-approved One Big Beautiful Bill Act nixes tax incentives for buying EVs—and these consumer credits expire Sept. 30.
In response, car sellers are willing to be “very aggressive to get EVs off the lot before all the credits expire,” Horwitz said.
For instance, one California dealership offers a $99 per month lease on Volkswagen’s 2025 ID.4 for 24 months and a $2,995 downpayment. According to the dealer, the offer includes a $5,000 cash back bonus. Similarly, a Michigan dealership offers a Chevrolet 2025 Equinox EV LT lease for $101 per month with a $1,999 downpayment, or $189 per month lease for 24 months with a $0 downpayment.
“Incentives as a percentage of average transaction price were more than two percentage points below the industry average,” GM CEO Barra said during Tuesday’s earnings call.
Still, Chevrolet’s website urges potential EV buyers to “Don’t Wait — Act Now” before the tax credit deadline.
GM’s EV business outlook
GM captured 16% of the U.S. EV market in Q2. Still a far cry from Tesla’s estimated 45.2% market share in the first two months of this year, the company announced record EV sales in the first half driven by Hummer and Sierra EV sales up 134%.
GM aims to pioneer a new “groundbreaking” EV battery technology the automaker says will reduce costs and boost profitability of its largest electric SUVs and trucks by 2028, CNBC reported in May.
In a Q4 letter to shareholders in January, Barra described GM’s EV business as “variable profit positive” for the first time—meaning revenues from its EVs exceeded the fixed costs of manufacturing the vehicles, including labor and building materials.
Barra said Tuesday she expects an EV sales “pull ahead” before the September tax credit deadline, telling investors once 2026 comes along, the automaker will “start to understand what real EV demand is.”
“What we’re investing going forward is largely focused on improving our EV profitability,” Barra said.
