Why Should General Motors Stock Holders Watch One Number

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General Motors (GM) expects higher costs for commodities, shipping and memory chips to take about $2 billion out of its profit in 2026, management said on October 20. That number matters because management said it can grow profit in 2027 assuming recent commodity pressures ease. So far, costs have kept rising instead. They have built since the summer, and most of the latest increase will land in the fourth quarter. So what is pushing General Motors' costs up?

Why Are General Motors' Costs Rising?

Rising commodity prices are the main reason, with management specifically naming steel and copper. Spot prices for each are up 10% to 15% since July, management said, while higher logistics and memory-chip costs add to the bill. GM measures this cost against the year before. The figure represents the extra money the company pays for the same inputs, and that amount comes straight off profit. In the third quarter alone, GM put the extra at about $700 million, mostly from commodity costs.

General Motors' Cost Bill Could Stay High In 2027

Management now expects the bill to reach about $2 billion for 2026, against the $14.5 billion to $15.5 billion of adjusted operating profit it expects for the year. This is a real cost, though the guided profit is still several times larger. On October 20, GM narrowed the range of its profit guidance. The earlier range was $14 billion to $16 billion.

Measured against last year, the jump in GM's inputs is steep. Steel and copper spot prices are each about 50% above last year's average. Management said it is too early to predict where commodity prices will land in 2027. Yet if the rise since July were annualized, management said it would add $1 billion to $1.5 billion of new headwind in 2027, for a total of roughly $2 billion. Prices at this level, management said, make 2027 more challenging.

Is General Motors' Stock Priced For Higher Costs?

Buyers have bid the stock up anyway. The stock did fall 6.8% on October 20, the day GM narrowed its profit guidance and flagged the higher costs. General Motors stock returned 26.4% over the twelve months to November 6, 2026, against 9.8% for the S&P 500. It trades at 19.0 times its trailing earnings, below 21.8 for the S&P 500. Those earnings include a loss in the fourth quarter of 2025. Management has tied the profit growth it expects in 2027 to commodity pressures easing.

GM does have real offsets. Its North American pricing is up $400 million so far in 2026, and management expects warranty savings near the top of its $1 billion to $1.5 billion target. A higher mix of full-size pickups and lower warranty expense lifted third-quarter adjusted operating profit. That figure rose $700 million from a year earlier to $4.1 billion. In addition, OnStar and Super Cruise are on track for more than $3 billion of revenue in 2026.

A holder should treat the cost bill as a real weight on profit, not a threat to the business. It is a modest share of GM's guided 2026 profit, and GM is making up part of it elsewhere. The worry would grow if steel and copper stay near today's prices into 2027, and it would shrink if they fall back. The commodity, shipping and memory-chip bill is the figure to watch when General Motors reports its fourth quarter, expected in January 2027. Management also plans to give its 2027 guidance then.

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