And Morgan Stanley analyst Adam Jonas had a blunt statement for CEO Mary Barra, comparing her company unfavorably to Tesla in the Q&A section of the earnings call.

Shares in GM tumbled 8% after second-quarter adjusted net profit fell by a sixth due in part to a $1.1 billion hit from the Trump administration’s tariffs. It comes after fellow Detroit carmaker Stellantis, the parent of Jeep and Ram, pre-announced results for the first six months that revealed it swung to a €2.3 billion ($2.7 billion) loss from a net profit of €5.6 billion the prior year.

A major uncertainty clouding the outlook for GM’s North American profits moving forward remains the impact of import duties. As a result, on Tuesday, Piper Sandler warned clients it’s possible that GM could end up closer to the $8.25 in adjusted earnings per share for this year rather than the upper bound of $10 in its forecast range.

“But to us, these aren’t thesis-defining issues. More problematic, in our view, is that the call focused almost entirely on tactical or cyclical topics,” it wrote in a research note.

Only worth paying five times next year’s earnings for GM, bank argues

The bank gave as an example issues like incentive spending, inventory levels, and cost offsets with regard to tariffs to name just one example. GM imports the popular Chevrolet Equinox and Cadillac Optiq EVs from Mexico. Both saw a surge in Q2 demand potentially reflecting pull-forward effects as dealers stocked up on inventory before the 25% auto sector tariffs hit, and as customers bought EVs before the September 30 deadline for the end of the federal EV credit, discontinued by the Trump Administration.

“In our view, if GM and other traditional automakers want to emerge from their multi-year funk, they don’t need smart tactics,” Piper Sandler continued, “they need bold strategic changes.”

Otherwise the bank will continue to view GM share based on the same $48 price target that represents five times next year’s forecast earnings. 

Shares in GM first listed on the New York stock exchange back in November 2010. At the time, the company boasted what it called a “fortress balance sheet” free of legacy risks like pension and healthcare obligations for staff and retirees that helped plunge it into bankruptcy the year prior. 

Yet investors that bought in at the IPO price of $33 have not been rewarded relative to the broader equity market. The stock has averaged just a 2.6% annual compound return in the subsequent fifteen years versus an 11.8% with the S&P 500. 

‘How does GM expect to be profitable with EVs when players like Tesla apparently cannot?’

By comparison, Piper Sandler views Tesla, a $1 trillion-plus megacap company in the Magnificent 7 stock group, as being fairly valued at 140 times its estimated 2026 earnings. A major reason for that lofty multiple is Tesla’s efforts in the area of artificial intelligence and humanoid robotics.

In a research note published this weekend, Piper Sandler argued a further geographic expansion of the Austin area serviced by Tesla’s new AI-powered robotaxi fleet (generally estimated to still include only a dozen cars) was likely favorable enough to overshadow any negative revisions to forecast earnings. CEO Elon Musk’s company is due to report quarterly earnings after the close of markets on Wednesday. 

GM did not respond to a Fortune request for comment made outside normal working hours. 

But the carmaker’s CEO, Mary Barra, faced scrutiny from analysts during her Q2 conference call, with another Tesla bull asking where are its humanoid robots?

“Elon seems to be also exiting the auto industry, clearly pulling capital out of the business and doubling down on AI, autonomy and robotaxis,” Morgan Stanley analyst Adam Jonas said during the Tuesday investor call. “So how does GM expect to be profitable with EVs when players like Tesla apparently cannot?”

Barra replied there were partnerships “we’re looking at” in the field of automation, but that when it comes to the subject, GM is mainly interested in improving efficiency at its automobile factories.

“Overall, we’re focused on what’s going to drive manufacturing optimization,” GM’s CEO answered.