Automakers Report Higher Revenue as Tariffs, Fuel and Chip Costs Rise

America's largest automakers reported higher third-quarter revenue while warning that materials, tariffs and transportation are making vehicles more expensive to produce. General Motors posted a 2.9% revenue increase from a year earlier, Ford gained 2% and Stellantis rose 1%. Demand for larger vehicles helped support those results despite persistent concerns about affordability.

GM said light-duty truck sales increased 9% over the past year, while Stellantis reported a 34% jump in U.S. pickup sales. Ford's F-Series remained a leading seller for the company. Buyers continued spending on bigger vehicles and more expensive trim levels, which generally deliver higher profits. According to Kelley Blue Book, the average new vehicle transaction price exceeded $50,000 in September, approaching a record.

Manufacturing costs are rising on several fronts. Since 2025, the Trump administration has imposed additional tariffs on imported steel, aluminum and copper. Copper prices also face pressure from demand for electric vehicle batteries and data centers. Memory chips used in vehicle electronics have become more expensive amid constrained supply and competition from industries including artificial intelligence. Stellantis CEO Antonio Filosa said higher chip and raw material prices would affect the entire industry.

Transportation adds another burden. AAA puts average diesel prices at around $6.35 a gallon, near September's record high. That increases the expense of moving finished vehicles to dealerships and transporting parts through closely connected U.S. and Canadian supply chains, where components may cross the border repeatedly. Ford Chief Financial Officer Sherry Ann House said fuel prices were raising freight and energy costs without weakening demand for trucks and fleet vehicles.

GM forecast costs for materials including computer chips and diesel could reach $2 billion this year. Chief Financial Officer Paul Jacobson also put tariff costs at about $2.5 billion, below earlier expectations partly because of tariff refunds. Ford expects commodities, memory and logistics to create roughly $2 billion in additional costs compared with last year. Its executives said growth elsewhere, including software services and parts, was helping compensate. Stellantis plans to give further cost details in the fourth quarter.

Automakers are also adjusting to the loss of the $7,500 federal electric vehicle tax credit, which Congress eliminated through the One Big Beautiful Bill Act. The credit expired September 30, 2025, and national EV sales subsequently declined, according to Edmunds and Cox Automotive. GM's overall third-quarter sales fell 6% from a year earlier, partly reflecting a smaller EV market. Jacobson said GM would align production with demand while maintaining its electric vehicle business.

After last autumn's decline, EV sales have stabilized, accounting for about 6% of U.S. new vehicle sales in September, according to Edmunds. Hybrid sales increased 27% over the past year. Ford executives highlighted plans to open preorders in early 2027 for the Fathom electric truck, priced below $30,000. Auto Forecast Solutions executive Sam Fiorani expects Detroit manufacturers to expand hybrid offerings as the transition to fully electric vehicles takes longer than anticipated.

Tesla has regained ground as other manufacturers retreat from some EV investments. Nearly 52% of new U.S. electric vehicle sales this year were Teslas, according to Edmunds, even as the company's quarterly global sales declined from a year earlier. Third-quarter revenue was roughly unchanged. CEO Elon Musk emphasized spending on robotaxis and humanoid robots, with capital expenditures nearly twice their year-earlier level.

On a SpaceX earnings call, Musk also said special committees at SpaceX and Tesla were discussing a possible merger. He expressed support but said shareholders would need to back it. Analysts said the companies have some technological overlap, although combining their businesses could prove difficult to sell to some Tesla investors.