COLMA, CALIFORNIA – JANUARY 06: Ford pickup trucks are displayed on the sales lot at Serramonte Ford on January 06, 2026 in Colma, California.
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American automakers are reporting their third quarter earnings, and they’re saying revenues are up, but they’re also facing some serious headwinds.
Or as Mike Wall, an analyst at the automotive data company Mobility Global, put it: If this year was a book about the auto industry, “It would be a mix of suspense and thrills and maybe a little bit of comedy and a little bit of horror.”
For the thrills: Auto companies are doing well when it comes to selling big cars and light-duty trucks. General Motors reported its sales of light-duty trucks rose 9% in the past year. Ford’s F-Series trucks continue to be a company bestseller. Stellantis’ pickup sales in the U.S. rose 34%.
And revenues overall are up: General Motors reported its revenue was up 2.9% in the past year; for Ford it was a 2% rise and Stellantis was up 1%.
To analysts, all of this signals that consumers are still buying vehicles — despite concerns about affordability. The average new vehicle transaction price was just over $50,000 in September, close to a record high, according to the Kelley Blue Book. Broadly speaking, customers are paying more for high-end trims and for bigger vehicles, which tend to be more profitable for the auto companies.
“Customers have been resilient amid higher fuel prices, interest rates and inflation,” said Sherry Ann House, Ford’s chief financial officer, on a call with investors.
But now for the suspense: The Detroit Three automakers are also cautioning investors that it’s getting more expensive to make cars. Key materials like steel, copper and computer chips have all gotten pricier.
“Should we see prices at this level, it makes that more challenging heading into next year,” Paul Jacobson, the chief financial officer of General Motors, said on the company’s earnings call.
On the call for Stellantis, which owns Chrysler and Jeep, CEO Antonio Filosa noted that higher prices for memory chips and other raw materials “will be an industry-wide phenomenon to work with.”
Tariffs, fuel and rising chip prices
Since 2025, the Trump administration has put additional tariffs on imported materials like steel, aluminum and copper. Much of a car’s frame — and weight — is steel. So are nuts and bolts.
Coppercritical for a car’s wiring and for electric vehicle batteries, has also grown more expensive — both because of tariffs and because there’s more global demand for it, especially as the need for EV batteries grows. Plus, copper wire is also in high demand for data centers.
Then there are the costs of computer memory chipswhich are used in a car’s electronics, and are more expensive due to a tight supply chain and demand from many industries, including from AI.
Plus, there are other logistics costs. To bring vehicles from factory floors to dealerships, they get shipped on trucks, many of which run on diesel. The average price for a gallon has been hovering around $6.35, just short of its September all-time high, according to AAA.
High diesel prices play out in other ways too. The U.S. and Canada have closely intertwined auto supply chains and parts often cross the border several times as they get shaped into a car. That movement becomes more expensive when fuel is pricier — and when the U.S. tariffs Canadian goods.
“Higher fuel prices are impacting our freight and energy costs. But notably, we are not seeing it impact customer demand for trucks and fleet vehicles at this point,” said House, the CFO of Ford.
In a report to investorsGeneral Motors forecast that the cost of materials including computer chips and diesel would run the company as much as $2 billion this year. GM is also still paying about $2.5 billion in tariff costs, Jacobson said — which was lower than the company’s earlier forecasts, partially offset thanks to tariff refunds.
In Ford’s earnings call, CEO Jim Farley noted a similar figure: “We currently expect commodities, memory and logistics costs to represent a year-over-year headwind of about $2 billion at Ford.”
Farley and House both said growth in other parts of Ford’s business, as well as software services and parts, are helping offset these costs.
On their call, Stellantis executives said they would provide more information about these costs in the fourth quarter.
All of this is disruptive for an industry that is not built for high-speed changes. It takes time and money for carmakers to plan which vehicles to build, how many, and to line up supply chains.
“ This is an industry that moves at a glacial pace between generations, between vehicles, between plants,” said Sam Fiorani, a vice president for Auto Forecast Solutions. “And so when you throw in tariffs and you throw in all kinds of disruptions between countries, it throws off the supply chain and the calculation for profit and loss.”
The electric transition
This quarter marked a full year since the demise of the $7,500 federal tax creditwhich incentivized car buyers to purchase electric vehicles. Congress nixed it as part of the One Big Beautiful Bill Act, and the credit ended on Sept. 30, 2025.
Data from the car analytics platforms Edmunds and Cox Automotive shows that after the credit went away, EV sales dropped nationally.
Tesla, which only makes EVs, reported that their global sales fell during the quarter, compared with the same period last year.
General Motors reported that its third quarter sales were down 6% overall compared to the previous year, partly because of the “smaller EV market.”
On GM’s call, Jacobson singled out the end of the tax credit as a reason for lower EV sales. He said the company plans to keep making electric vehicles, and that it’s “right-sizing” its capacity and aligning its production with demand. “We think with these oil prices and these fuel prices that EV penetration may continue to go up, and we want to make sure we’re ready for that,” he said.
On Ford’s call, executives didn’t address EV sales, but they were enthusiastic about the Fathoman electric truck the company plans to make available as a pre-order in early 2027, priced under $30,000.
But there are two bright spots for automakers when it comes to EVs. First, after last autumn’s drop, EV sales have leveled out. As of September, they now make up about 6% of new car sales in the U.S., according to Edmunds.
American shoppers have also taken a greater interest in hybrids, especially given high fuel prices. Sales of hybrids are up 27% in the past year, according to Edmunds.
American automakers have noticed this trend, said Wall. “We have seen more inclination and more movement towards hybrids, and some automakers are adjusting their product plans accordingly,” he said. But he added, gas-powered cars are still driving the profits of the big companies.
When it comes to electric vehicles, the companies are stuck in a kind of Catch-22. On the one hand, they’re international companies — and EV demand is growing globally. Over 30 percent of new cars sold in Europe last year were electric. In China, more than half were, according to the International Energy Agency.
But EV demand in the U.S. just isn’t the same. American drivers have long expressed concerns about limited rangecharging infrastructure, or the cost of replacing an enormous lithium-ion battery.
“The thinking 10 years ago was we’re going to skip hybrids and go right to electric vehicles. So we saw a lot of investment in factories, in battery plants, in new platforms to build fully electric vehicles,” Fiorani said. But “when that volume didn’t show up, they had to backtrack and develop new internal combustion vehicles going forward.”
Fiorani expects to see the Detroit Three automakers offer more hybrid vehicles in the coming years, he said, “because this transition towards fully electric vehicles is going to take a lot longer than they anticipated.”
Tesla’s regaining ground
The Detroit Three’s pullback in electric vehicles has given Tesla a leading edge — again. The company’s third quarter revenue is about the same as it was this time last year, but its market share has grown.
Tesla used to sell the majority of EVs in the U.S. In 2024 and 2025, Tesla lost that lead. This year, it’s winning the majority back: almost 52% of new EV sales in the U.S. have been Teslas, according to Edmunds.
“It makes sense that Tesla is clawing back market share,” Ivan Drury, the director of industry insights at Edmunds, wrote in an email to NPR. Between other automakers peeling back some of their investments, plus the cancellation of the credit, Drury said, many buyers are probably going with what they know.
“Tesla is like the Kleenex of EVs,” he continued. “Many people just default to them regardless of other offerings.”
Still, on Tesla’s earnings call, CEO Elon Musk did not spend much time talking about cars. He said they’re focused on building new technologies, like robotaxis and humanoid robots, and they’re investing a ton in these endeavors. Their capital expenditures this year are almost double from this time last year.
And on an earnings call for his rocket company SpaceX, Musk hinted at the possibility of a merger between the two companiessaying that special committees at each were discussing it. “Do I think it would be a good idea? Yes,” he told investors. “But at the end of the day, the shareholders would have to be supportive of this.”
While analysts say there is some technological overlap between the two companies, a merger could be a hard sell for some Tesla shareholders, who would need to embrace adding SpaceX’s business portfolio — Starlink satellites, the Grok AI chatbot, the X.com social media site — to Tesla’s automotive business.
Source: www.npr.org
