First quarter results are starting to roll in for American automakers, and General Motors is up first this morning with some good news. The company’s margins are good and people are still buying trucks. Even better, the company gets a nice big chunk of change back from the administration in the form of a tariff refund.
If you read The Morning Dump every day, as 2-out-of-10 doctors recommend, the story of the market continues to be that the buyers who can afford expensive nice, new vehicles don’t seem to be that bothered by high gas prices. At least not yet. That’s music to the ears of dealers. The persistent drumbeat of Carvana and CarMax coming for their customers, though, isn’t something dealers want to hear.
The big Chinese car show is ongoing and there’s a new list of five cars you could buy for the average price of an America car, which I think is a little misleading. That’s all heavy, so let’s end with a sweet Caterham.
A Bonus $500 Million Is Icing On The Cake For GM
When the Supreme Court struck down certain tariffs illegally enacted by the Trump administration, it didn’t impact most of the trade barriers that automakers (and, eventually, consumers) are facing. It did reverse some of them, though, and for GM that’s more cash on top of an otherwise good quarter, as CEO Mary Barra mentions in her latest shareholder letter:
In the first quarter of 2026, General Motors once again delivered strong financial performance, driven by our strategic product portfolio and disciplined execution by our teams, dealers, and suppliers.
Our EBIT-adjusted of $4.3 billion surpassed our expectations even after excluding a $500 million tariff adjustment following a recent U.S. Supreme Court decision. To reflect the flow-through of this adjustment, we are raising our full‑year EBIT‑adjusted guidance by $500 million, to a range of $13.5 billion to $15.5 billion.
We have solid momentum in our core operations: We maintained overall sales leadership in the U.S. and Canada. We led the U.S. industry in full-size pickup sales and share, with 42% of the market, and we were #1 in Fleet, including Commercial deliveries. In addition, we were #2 in EVs with growing market share, and #1 in Canada.
GM continues to be in decent shape, and may be even more profitable because of the drop in expensive, money-losing EV production. The market hasn’t reached the point where higher gas prices (which were up again to a peak yesterday) are stopping people from buying exactly the kind of large trucks that GM makes so well. The company also is spending less than the industry average on incentives.
Not everything is perfect. Buick is entirely reliant on imports, which means there’s a tariff cost to its most affordable models, which typically have thinner margins than full-size trucks and SUVs.
‘There’s A Whole New Generation Of People’ Who Have Only Done Digital Car Purchases, Warns Analyst
Both CarMax and Carvana represent serious competition for car dealerships as they’re rivals for both sales and inventory, and that’s before considering whatever Carvana is doing buying all of those Chrysler Dodge Jeep Ram rooftops.
A new survey from financial advisor group Stephens, Inc. shows that, unsurprisingly, dealers see both CarMax and Carvana as potential threats for the above reasons, but I think this comment from analyst Jeff Lick, via Car Dealership Guy, points out a longer term threat:
“If somebody shows up on the car lot, they’re there for a reason, and they’re willing to buy from a car lot. The bigger issue that some of the dealers have is that Carvana has created a whole complete process in your driveway system. So you may never see that person…There’s a whole new generation of people who might be 25 that all they’ve ever done is digital.”
I know plenty of people who have had good experiences with Carvana and never needed to walk into a dealership. Carmakers are working on a way to give this experience to customers, via dealers, but it’s possible there’s a generation that doesn’t like buying things in person and will extend that preference to cars as well.
The flipside of this is also a risk to dealers, as becoming so good at selling cars digitally makes it easier for automakers to reduce their dependence on them.
Here Are Five Cars You’d Probably Not Buy Instead Of Grand Highlander, That Would Also Be More Expensive If Ever Actually Sold In The United States
There’s a Reuters list today that’s being published in various outlets (you can read it without a subscription here at The Detroit News), and I don’t really love the framing of it, which is: “For the average price of one car in U.S., you could buy 5 new Chinese EVs.”
Well, no, you couldn’t. Not unless you live in China. In fairness, Reuters does say this in the piece:
Reuters compiled a list of the five best-selling electric vehicles in China that start under $12,000 using DCar data.
These small EVs aren’t available for sale in American showrooms – and may never be – but for about the price of an average new car in the U.S., a consumer in China could buy all five of these EVs.
If you can look past the tariff barriers, there’s also the reality that most Americans don’t want something this small. Some people do, and I’m extremely pro bringing back smaller, more affordable cars like the Honda Fit.
I think the biggest issue is that this article (and videos from influencers) gives people the impression that this is what these cars would cost if they came to the United States. China has provided a lot of incentives to Chinese automakers and there are too many in the market, leading to a brutal price war there.
A good data point is the BYD Seagull/Dolphin Mini, which is noted as having a starting price of $10,200. The Seagull is a great story and a well-packaged vehicle at a low price, but we can see what it costs to make it acceptable to a market similar to ours. The cost of the European-ized Segaull, which we drove last year, went from $10,000 to $26,000. In Mexico, it’s about $24,000.
When comparing apples to apples, it’s probably fairer to say you could buy two of these small cars for the price of one average car. At the same time, you could also get two Nissan Sentras or maybe even a pair of Traxes for the same price.
Check Out This Cool Miami-Themed Caterham
Fortunately for you, I’ve known the press people for the newly reinvigorated Caterham for decades now, so I get all the releases from the British carmaker. Fortunately for them, I’m a sucker for these cars, having last driven one on Hwy 33 in California.
There’s a new “Miami-themed one” that reflects the nearby GP circuit:
Motorsport fans attending the race will have the opportunity to see this lightweight, track-focused special edition from Caterham for the first time on Friday 1st May on Race Street, located in the West Campus of the Miami International Autodrome
The vehicle will be finished in a bespoke Aqua custom paint with a unique Miami Special Edition decal pack in Vibrant Pink and White. To finish the exterior design, the iconic Miami script and silhouette of the circuit features on the rear of the car.
The bespoke aesthetics continue throughout the interior with the Miami script embroidered on the headrests, and an individual numbered plaque located on the dashboard. The hand-built nature of a Caterham Seven means the cars also feature a second plaque in the engine bay, engraved with the names and signatures of the two builders who were responsible for hand assembling the car at the factory in the UK.
The company seems to be going out of its way to not say “Formula 1” as I’m guessing there’s no F1 deal. It’s fine, everyone knows what they mean. As with other Sevens, you get the 2.0-liter Ford Duratec, which is good for 210 horsepower and a run up to 60 mph in 3.8 seconds. If you’ve never tried it, 60 mph in a Seven feels like 300 mph in whatever you drove to work this morning.
Also, you get a free Cuban sandwich. That’s not in the press release. I’m just assuming.
What I’m Listening To While Writing TMD
That’s right, y’all, it’s “Brick House” by The Commodores.
The Big Question
What would you do with a $500 million refund?
Top graphic images: GM
Having a 500 million dollar refund would imply that I once had 500 million dollars and I am now struck wondering how TF that happened.
If I had 500 million, I’m bringing back the 1988 Dodge Dakota single cab long bed with the 2,000-pound payload. I’ll throw in a tiny 3-inch screen for legal purposes and have it able to be removed with a Phillips screwdriver.
Analog baby!
Build a movie/home/both theater that doesn’t have shared armrests. I cannot fathom having infinite money to do infinite things and still having to share a goddamn armrest in my own personal screening room.
Gonna be a lotta’ rednecks trading those brodozers back in since they can’t afford to fill them up let along make the $800 a month payments.
…..Buick is entirely reliant on imports, …… Enclave is built in Lansing. (with 36% usa canada content- so, you are close. (sales weighted – 9% US content across the board) )
if only they could stop their truck engines from blowingup. 3.0 duramax/ 6.2 v8
gene is correct. 6% of the last 600,000 6.2 V 8 made have failed on the road.
I so agree with you.
https://youtu.be/bn38scz4GFY?si=MaoaZoBv0KlgU8nW
In small font at the bottom of the GM press release:
Returning GM employee lessees can qualify for a portion of the tariff refund provided they show up in person to the GM world headquarters on the third Sunday after the following one before moonrise with the proper forms signed in triplicate and notarized by a man aged 43 or a women named Helene. It’s that simple!
I believe the reason the Amazon car partnerships went so badly is they were still using traditional dealers. I still don’t quite understand the logic behind buying a used car as a daily driver completely unseen. But they would probably just look at it and maybe test drive it. But surely there are some vehicles (Subaru) you would test drive and go nope nope not for me.
Chinese have been selling panda cars on jd for a decade or more. They just show up like the used carvana cars. That seems like the experience many consumers want along with manufacturers. But how do you do that with greasy greedy dealers in the middle.
When the Chinese cars are coming into markets that could really give them a boost. They seem to be going to traditional dealership route in most markets they enter but they could set it up in a way that also allows direct to consumer. Chinese will try just about anything. That Volvo car as a subscription where you can rent it out to subsidize your subscription was a fascinating idea and I’m kind of shocked there wasn’t more people taking it. Maybe if it was a geely for 1/3 the cost it would have done better. Just like car2go used to do well in cities.
How many caterhams can I buy for $500M? Thats what I would do.
You might be able to buy Caterham Cars outright!
My go-to answer for “what if you inherited a buttload of money” is simple: I’d found a hugely unprofitable polling outfit that’d ask all kinds of very rude questions.
Sorry for the unfunny answer but there you are.
Oh, and… so corporate America got reparations, did they? Somehow I’d missed this.
I’d like to see a breakdown on how the $10k chinese vehicle ends up costing $24k in other markets. That difference is enormous! Shipping doesn’t cost that much, so how much is compliance with different safety rules, how much is domestic chinese subsidies, how much is tariffs, and how much is BYD being willing to lose money on each domestic unit due to cutthroat competition?
Alot of that is vat tarriffs and other taxes / fees. When you take them away I’ve seen estimations around $14k to $15k. Its also a completely different car then to what is sold in China for $8k to $10k. Its’s bigger with more structural support and features.
$500 million?? I am BUYING the huge billboard across from where I work.I will have a photo of me smiling and pointing to the building and it will say “ENJOY YOUR DAY”.
I got to drive in a caterham 7 a few weeks ago. I’m completely hooked. I’ve been in Ferarris, Porches, Tesla Plaids: Nothing else has come remotely close to that experience.