GM beats Q2 profit and announces gas-powered Cadillacs as nearly $11 billion EV retreat draws to a close.

General Motors beat Wall Street’s second-quarter estimates by 37 cents a share on Tuesday, raised its full-year earnings guidance for the second time this year, and used the same earnings call to announce that Cadillac will introduce new gas-powered versions of the CT5 sedan, XT5 crossover, and discontinue the XT6 SUV starting next spring. Revenue came in at $48 billion, above the $47 billion they expected, and adjusted earnings rose nearly 30 percent year-over-year to nearly $4 billion. CFO Paul Jacobson told CNBC that the company’s stock “to negotiate” at about $75 a share, up more than 40 percent from last year.

Cadillac’s announcement is a clear sign, however, that GM’s all-electric strategy is over. The company had planned for Cadillac to sell only electric vehicles by the end of the decade, but CEO Mary Barra said Tuesday that next-generation gas-powered Cadillacs will begin arriving in showrooms next spring and continue through 2028. The new models will sit alongside Cadillac’s electric crossovers and the successful Escaladetrain as an SUV. the best electric GM has ever promised.

GM raised its full-year EBIT guidance to between $14 billion and $16 billion and its adjusted EPS forecast to between $12 and $14, each up $500 million from prior ranges. It also raised its adjusted forecast for auto free cash flow by the same $500 million. But it lowered its net income for the second quarter in a row, to about eight to ten billion dollars, reflecting continued costs from the EV retreat.

Those costs are now more comprehensive, as GM has recorded nearly $11 billion in EV-related write-offs since the second half of last year that include canceled battery contracts, idled plants, and abandoned production plans. The company said it paid $4.5 billion of the expected amount of just over $7 billion in capital expenditures in the second quarter, with most of the remainder expected to be paid out this year. EV losses decrease by one billion to one and a half billion compared to 2025, according to the company.

North America continues to do business. Barra said in a shareholder letter that the region’s adjusted profit margin rose to more than eight and a half percent, up more than two percentage points from last year, while vehicle prices were held at $52,000 and warranty costs fell. GM International, including its Chinese joint ventures, was profitable, and Jacobson said the company’s first-quarter earnings per share were 25 percent higher than any first quarter in GM’s history.

Strong benefits come against a complex marketing picture. GM unit sales fell 4 percent in Q2 as Toyota continues to close the gap as the best-selling company in America, due to the need for GM to not have inventory to match. The company has also reorganized its workforce around AI and software-defined vehicles while backing away from the EV and robot bets that defined its strategy two years ago.

What’s left is the company generating record first-quarter earnings for its truck and SUV businesses while unwinding the electric ambitions that should define its future. The Cadillac ICE revival, rising margins, and shrinking EV losses all point in the same direction, the Detroit automaker betting badly on the speed of the EV revolution and now rebuilding around the combustion engine vehicles that still generate most of its profits. Barra also announced plans to bring more manufacturing to the coast starting next year, including shifting full-size SUV production to a Michigan plant originally slated to build electric vehicles.