GM Stock Slumps as Tariff Exposure Alarms Investors

Automaker Hit Harder Than Rivals Amid Tariff Fallout

As auto stocks reacted to the latest tariff announcement out of Washington, D.C., on Thursday, General Motors took the brunt of the hit.

Shares of GM were down more than 6% in mid-morning trading, far underperforming Ford and Stellantis, which shed about 2% and 1%, respectively. Tesla stock bucked the trend, climbing more than 5%.

Mexico Exposure at the Core of GM’s Decline

The divergence stems from the number of vehicles GM imports, particularly from Mexico.

“Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities although Ford does face incremental exposure on imported engines,” Deutsche Bank analysts wrote in a note Thursday. “GM has the most exposure to Mexico.”

President Donald Trump on Wednesday announced 25% tariffs on all cars not made in the United States, as well as certain parts. While the executive order allows leniency for components compliant with the USMCA, the exact implications for North American automakers remain unclear.

Heavy Reliance on Imports Undermines GM

Mexico made up 16.2% of U.S. vehicle imports by sales in 2024, the largest share of any country. That’s roughly double the shares of South Korea and Japan, which ranked second and third, respectively.

According to Barclays analyst Dan Levy, 52% of GM vehicles sold in the U.S. during the first three quarters of 2024 were assembled domestically. However, 30% were built in Canada and Mexico, with another 18% imported from other countries. GM also heavily depends on Mexico and South Korea for models like the Equinox and Blazer.

Comparisons with Stellantis and Ford

Stellantis assembled 57% of its U.S.-sold vehicles stateside and 39% in Canada and Mexico. Ford performed best on this metric, assembling 78% of its U.S.-sold vehicles domestically and just 21% abroad.

Wolfe Research’s Emmanuel Rosner noted that 15% of GM’s U.S. vehicles originate from South Korea, further increasing its exposure. John Murphy of Bank of America said GM is “relatively exposed to the tariffs” and may need to reassess its global production strategy.

GM stock is down 13% year to date. Shares slumped sharply in January after the company failed to address tariff risks in its earnings report.