GM reports better-than-expected earnings for the second quarter and reveals plans for gas-powered Cadillacs as its nearly $11 billion retreat from electric vehicles approaches completion.

      TL;DR: GM surpassed Q2 expectations by 37 cents per share, increased its guidance, and revealed plans for gas-powered Cadillacs in 2027 as it wraps up its EV strategy.

      General Motors exceeded Wall Street's Q2 forecasts by 37 cents per share on Tuesday, updated its total yearly earnings guidance for the second time this year, and took the opportunity during the earnings call to announce that Cadillac will introduce new gasoline-powered versions of the CT5 sedan, XT5 crossover, and discontinued XT6 three-row SUV starting in the spring. The revenue reached $48 billion, surpassing the anticipated $47 billion, while adjusted earnings climbed roughly 30 percent year-over-year to nearly $4 billion. CFO Paul Jacobson stated to CNBC that the company's stock is currently a "bargain" at approximately $75 per share, which is over 40 percent higher than a year ago.

      The Cadillac announcement signals a definitive shift away from GM’s all-electric approach. The company had aimed for Cadillac to exclusively sell electric vehicles by the end of the decade, but CEO Mary Barra mentioned that new gasoline-powered Cadillacs would be available in showrooms starting next spring and continue through 2028. These new models will coexist with Cadillac’s current electric crossovers and the Escalade SUV, effectively transforming the brand into a dual-powertrain lineup instead of the all-electric flagship GM once envisioned.

      GM has increased its full-year adjusted EBIT guidance to between $14 billion and $16 billion and adjusted EPS forecast to between $12 and $14, both raised by $500 million from previous projections. Additionally, it revised its adjusted automotive free cash flow forecast upward by the same $500 million. However, it lowered its net income guidance for the second consecutive quarter to approximately $8 to $10 billion, reflecting ongoing costs related to its shift away from EVs.

      Those costs are nearing completion, with GM reporting nearly $11 billion in EV-related write-downs since last year, which includes canceled battery contracts, idled plants, and halted production plans. The company mentioned it has already expended $4.5 billion of an expected total of just over $7 billion in cash charges through the second quarter, with most remaining expenditures anticipated this year. According to GM, EV losses are decreasing by about $1 billion to $1.5 billion compared to 2025.

      North America continues to support the business significantly. Barra shared in a letter to shareholders that the region's adjusted profit margin has risen above 8.5 percent, an increase of more than two points from last year, while average vehicle transaction prices remained around $52,000, and warranty costs decreased. GM International, which includes its joint ventures in China, also saw profitability. Jacobson noted that the company’s earnings per share for the first half of the year are 25 percent higher than any previous first half in GM's history.

      These strong earnings come amid a more complex sales landscape. GM’s unit sales dropped 4 percent in Q2 as Toyota continued to close the gap in the race for America’s top-selling automaker, fueled by hybrid demand that GM is unable to compete with. The company is also restructuring its workforce to focus on AI and software-defined vehicles while stepping back from the EV and robotaxi strategies that defined its approach just two years prior.

      What remains is a company that is reporting record earnings in the first half from its truck and SUV segments while retracting its electric ambitions that were meant to define its future. The revival of Cadillac’s ICE models, the increasing profit margins, and the shrinking EV losses all indicate a Detroit automaker that miscalculated the pace of the EV transition and is now refocusing on combustion-engine vehicles that still account for the majority of its profits. Barra also announced plans to bring more manufacturing back to the U.S. starting next year, including relocating full-size SUV production to a Michigan plant originally intended for electric vehicle manufacturing.