Since the third quarter of 2025, General Motors has experienced a dramatic improvement in free cash flow, with quarterly FCF rising from $1.8 billion in Q3 to $4.3 billion in Q4, a 139% increase. This surge prompted investors to reassess the durability of GM’s cash generation rather than banking on a near-term rebound in operating margins. The unexpected flow of liquidity has been driven by tighter working-capital controls, higher retail deliveries in the U.S. market, and lower incentive spending, underscoring GM’s ability to convert sales into cash even in a moderated margin environment.

GM’s balance sheet has strengthened markedly, with net debt falling by 15% over the past six months to approximately $40 billion. This reduction has alleviated concerns about leverage risk and paved the way for the company to resume and expand shareholder distributions. In Q4, GM reinstated a quarterly dividend of $0.09 per share and authorized $1 billion in share repurchases, signaling management’s confidence in sustaining capital returns without eroding financial flexibility.

In late 2025, GM announced a strategic realignment of its electric-vehicle investment, cutting its 2026–2030 capex plan from $35 billion to $28 billion. The move, described by management as prudent capital discipline, was welcomed by the market as a way to lower future cash absorption without undermining long-term EV ambitions. Analysts at several research firms have revised upwards their free-cash-flow forecasts by 10–15% over the next two years, attributing the re-rating to more sustainable cash usage and a clearer pathway to profitability in GM’s EV lineup.