Q3 Earnings, One Shared Warning: Tariffs, Chips and Diesel Are the New Cost Squeeze

The third-quarter earnings season has produced an unusually consistent message from America’s automakers: sales and revenue are holding up, but a trio of cost pressures — tariffs, computer chips and diesel — is squeezing profits. General Motors reported revenue up 2.9% to $50 billion, Ford revenue up about 2% to $49.5 billion, and Stellantis revenue up 1% to €37.6 billion, yet all three flagged the same headwinds on their earnings calls, according to coverage of the results.

The numbers attached to those warnings are large. GM forecast that materials including chips and diesel could cost it as much as $2 billion this year, and said it is still paying about $2.5 billion in tariff costs, lower than earlier forecasts partly thanks to tariff refunds. Ford chief executive Jim Farley put the company’s commodities, memory and logistics headwind at about $2 billion year over year. Stellantis said it expects $1.1 billion in tariff costs for the full year, including $667 million incurred through September, and warned of additional fourth-quarter costs from pricey chips and rising recall expenses.

What this means for buyers is less dramatic than a price spike, but it matters: when costs rise $2 billion at a time, automakers have less room to discount. GM chief financial officer Paul Jacobson warned that prices at current levels make next year more challenging, and Ford chief financial officer Sherry Ann House echoed the caution. The average new-vehicle transaction price was just over $50,000 in September, close to a record high, according to Kelley Blue Book figures cited in the coverage — so the industry is already selling expensive cars into a cost squeeze, not cheap ones.