General Motors (GM) posted a 7% second-quarter U.S. sales gain and doubled EV volumes, yet a Cox Automotive forecast now puts Toyota within striking distance of the top spot by year-end – a competitive pressure investors cannot ignore.
The narrowing gap between GM and Toyota signals a structural shift in buyer preferences that could weigh on GM’s pricing power and mix-driven margins over the next several quarters.
Key Takeaways
- GM Q2 U.S. sales rose 7%; first-half sales up 12% industry-leading.
- Toyota closing fast – projected just 83,255 units behind GM at half-year.
- GM EV sales more than doubled in Q2; hybrids surge industry-wide.
Competitive Positioning: The Toyota Threat
Toyota Motor (TM) is forecast to report a nearly 1% first-half sales increase to approximately 1.25 million U.S. vehicles, while GM is projected down 7.2% to 1.33 million units through June 2026, according to Cox Automotive data released Wednesday 1. That roughly 83,000-unit gap would be the tightest between the two automakers since Toyota briefly topped GM in 2021.
“At these rates, and what we’re seeing right now in the selling rates, GM may be looking over their shoulder here when we get to the year’s end, that Toyota could potentially overtake them as the top selling manufacturer here in the U.S. market,” said Charlie Chesbrough, senior economist at Cox Automotive 1. Chesbrough stopped short of forecasting an outright Toyota victory but called the trend “concerning for General Motors.”
GM’s Near-Term Sales Strength
Despite the competitive headwind, GM’s own figures through mid-2025 painted a stronger picture. The automaker said U.S. sales rose 7% in the second quarter and 12% in the first half of 2025, outpacing the industry’s estimated 4% total growth 2. GM attributed the gains to all-new or redesigned crossovers including the Chevrolet Trax, Traverse, and Equinox, along with record Sierra deliveries under GMC.
Buick, which now sells only crossovers, led mainstream brands with a 29% first-half sales increase, while Chevrolet posted its best first-half performance since 2019 2. GM also said it became the industry’s No. 2 electric vehicle seller in 2024 and that EV sales surged more than 100% in Q2 2025, with Chevrolet briefly claiming the title of best-selling EV brand during the quarter.
Full-Year 2025 and the EV Tax Credit Shock
Full-year 2025 results complicated the picture. GM reported 2.85 million U.S. vehicles sold for the full year, up nearly 6% from 2024 and enough to retain the No. 1 spot – but Q4 alone slipped roughly 7% year-over-year as the $7,500 federal EV tax credit expired on September 30 3. GM’s own EV deliveries fell 43% in Q4 as buyers had pulled purchases forward into Q3 to capture the credit.
The pattern was industrywide: Ford’s Q4 EV sales plunged approximately 52%, and Hyundai’s IONIQ 5 dropped 58% in the same period 3. Toyota, which leaned heavily into hybrids rather than pure EVs, was largely insulated – its electrified vehicles represented 47% of full-year 2025 volume, the vast majority being hybrids.
Tariff Drag and the Earnings Overlay
Sales volume alone does not tell the full profitability story. GM absorbed an estimated $1.1 billion tariff-related loss in Q2 2025, a drag that management attributed to the administration’s import duties on auto parts and vehicles 4. That cost headwind, combined with rising incentives needed to move EV inventory post-credit expiration, creates a margin squeeze that analysts are watching closely heading into the second half of 2026.
Full-size pickups – GM’s highest-margin products – continued to be a relative bright spot. The combined Silverado and Sierra lineup posted its sixth consecutive year of sales growth in 2025, GM’s best two-decade run in the segment, and full-size SUVs including the Tahoe and Suburban extended GM’s dominance in that category to 51 consecutive years 3.
Outlook
Duncan Aldred, GM senior vice president and president of North America, said the company’s investment in crossovers, SUVs, and pickups – across both gasoline and electric powertrains – had made GM “the engine of growth for the U.S. industry” in 2025 2. Whether that momentum holds into 2026 depends heavily on how quickly buyers re-engage with EVs absent the federal credit and how aggressively Toyota continues to expand its hybrid lineup in price-sensitive segments.
Cox Automotive’s Chesbrough said he is not yet forecasting Toyota overtaking GM for the full year, but the narrowing gap and GM’s projected 7.2% first-half decline in 2026 suggest the market-share battle is far from settled 1.
Not investment advice. For informational purposes only.
References
1Wayland, Michael (Jun 24, 2026). “Toyota gains on General Motors in new U.S. sales forecast: ‘GM may be looking over their shoulder'”. CNBC. Retrieved July 1, 2026.
2(Jul 1, 2025). “GM posts strong Q2 and first half sales on industry leading growth”. General Motors Investor Relations. Retrieved July 1, 2026.
3(Jan 6, 2026). “Q4 and Full-Year 2025 Vehicle Sales: GM Leads U.S. Market, Hybrids Surge as EV Sales Collapse”. Autobody News. Retrieved July 1, 2026.
4(Jul 22, 2025). “2025 GM Q2 Earnings Reports $1.1B Tariff Loss – Better with Mary?”. Pickup Truck Plus SUV Talk via YouTube. Retrieved July 1, 2026.