TL;DR

GM beat Q2 estimates by 37 cents a share, raised guidance, and announced gas-powered Cadillacs for 2027 as its EV pullback nears completion.

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 launch new gas-powered versions of the CT5 sedan, XT5 crossover, and discontinued XT6 three-row SUV starting next spring. Revenue came in at $48 billion, above the $47 billion analysts had expected, while adjusted earnings rose roughly 30 percent year over year to nearly $4 billion. CFO Paul Jacobson told CNBC the company’s stock is a “bargain” at roughly $75 a share, up more than 40 percent from a year ago.

The Cadillac announcement is the clearest signal yet that GM’s all-electric strategy is over. The company had planned for Cadillac to sell only electric vehicles by the end of this 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 existing electric crossovers and the Escalade SUV, effectively rebuilding the brand as a dual-powertrain lineup rather than the all-electric flagship GM once promised.

GM raised its full-year adjusted EBIT guidance to between $14 billion and $16 billion and its adjusted EPS forecast to between $12 and $14, each lifted by $500 million from prior ranges. It also raised its adjusted automotive free cash flow forecast by a matching $500 million. But it lowered its net income guidance for the second consecutive quarter, to roughly eight to ten billion dollars, reflecting ongoing charges from the EV retreat.

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Those charges are now substantially complete, with GM having recorded nearly $11 billion in EV-related writedowns since the second half of last year covering cancelled battery contracts, idled plants, and scrapped production plans. The company said it has paid four and a half billion dollars of an expected total just above $7 billion in cash charges through the second quarter, with most remaining outflows expected this year. EV losses are narrowing by one billion to one and a half billion dollars compared with 2025, according to the company.

North America continues to carry the business. Barra said in a shareholder letter that the region’s adjusted profit margin rose to above eight and a half percent, up more than two points from a year ago, while average vehicle transaction prices held at $52,000 and warranty costs declined. GM International, including its China joint ventures, was profitable, and Jacobson said the company’s first-half earnings per share are 25 percent higher than any prior first half in GM’s history.

The strong earnings come against a more complicated sales picture. GM’s unit sales fell four percent in Q2 as Toyota continued closing the gap for the title of America’s top-selling automaker, driven by hybrid demand that GM has no lineup to match. The company has also been restructuring its workforce around AI and software-defined vehicles while retreating from the EV and robotaxi bets that defined its strategy just two years ago.

What remains is a company generating record first-half earnings from its truck and SUV business while unwinding the electric ambitions that were supposed to define its future. The Cadillac ICE revival, the rising margins, and the narrowing EV losses all point in the same direction, a Detroit automaker that bet wrong on the speed of the EV transition and is now rebuilding around the combustion-engine vehicles that still generate most of its profit. Barra also announced plans to onshore more manufacturing starting next year, including shifting full-size SUV production to a Michigan plant that was originally slated to build electric vehicles.