GM tops Q2 and brings gas Cadillacs back

General Motors beat Wall Street’s second-quarter estimates by 37 cents a share on Tuesday, raised its full-year guidance for the second time this year, and signaled a major reset for Cadillac by confirming new gas-powered models starting next spring.

Revenue reached $48 billion, ahead of the $47 billion analysts expected, while adjusted earnings rose about 30% year over year to nearly $4 billion. CFO Paul Jacobson told CNBC the stock is a “bargain” at roughly $75 a share, up more than 40% from a year ago.

The biggest strategic shift came at Cadillac. GM had previously said the brand would sell only electric vehicles by the end of this decade, but CEO Mary Barra said next-generation gas-powered versions of the CT5 sedan, XT5 crossover, and discontinued XT6 three-row SUV will begin reaching showrooms next spring and continue through 2028. Those vehicles will join Cadillac’s existing electric crossovers and the Escalade, leaving the brand with a dual-powertrain lineup instead of the all-electric future GM once promised.

GM also raised its full-year adjusted EBIT guidance to $14 billion to $16 billion and its adjusted EPS forecast to $12 to $14, with both ranges lifted by $500 million. Its adjusted automotive free cash flow forecast also increased by $500 million. But GM cut its net income guidance for the second consecutive quarter, to roughly $8 billion to $10 billion, reflecting charges tied to its EV retreat.

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GM said those charges are now largely complete. Since the second half of last year, the company has recorded nearly $11 billion in EV-related writedowns tied to cancelled battery contracts, idled plants, and scrapped production plans. It has already paid $4.5 billion of expected cash charges totaling just above $7 billion through the second quarter, with most of the remaining outflows expected this year. The company said EV losses are narrowing by $1 billion to $1.5 billion compared with 2025.

Cadillac gas models and GM guidance

North America remains GM’s profit engine. In a shareholder letter, Barra said the region’s adjusted profit margin rose to above 8.5%, up more than two points from a year ago. Average vehicle transaction prices held at $52,000, while warranty costs declined.

GM International, including its China joint ventures, was profitable, and Jacobson said the company’s first-half earnings per share were 25% higher than any prior first half in GM’s history. Still, the sales picture was softer: GM’s unit sales fell 4% in Q2 as Toyota kept gaining ground in the race to be America’s top-selling automaker, helped by hybrid demand GM cannot match with its current lineup.

Barra also said GM will onshore more manufacturing starting next year, including moving full-size SUV production to a Michigan plant that had originally been slated to build electric vehicles.