GM keeps Cadillac gas models in the pipeline as EV plans cool

General Motors is giving Cadillac more gasoline-powered products, a shift that matters for investors because it shows the automaker is still adjusting its electric vehicle spending to match customer demand and U.S. policy. GM CEO Mary Barra said Tuesday that next-generation Cadillac vehicles with internal combustion engines, meaning traditional gas engines, will start arriving next spring and continue through 2028.

Barra made the comments during GM’s second-quarter earnings call. She said the lineup will include new versions of the CT5 sedan, the XT5 midsize SUV and the XT6 three-row SUV, which had been discontinued.

The new gas models will sit alongside Cadillac’s current electric crossovers and the Escalade SUV, Barra said. That keeps Cadillac from moving as quickly toward an all-electric showroom as GM once planned.

Cadillac’s EV-only target has softened

GM had previously aimed for Cadillac to sell only electric vehicles by the end of this decade, according to CNBC. The latest product plan moves the brand away from that target by keeping conventional engines in the mix for several more model years.

For retail investors, the key issue is capital discipline. Developing EVs requires spending on batteries, vehicle platforms, factories and supply chains before sales volumes fully arrive. If adoption runs slower than expected, automakers can be left with too much EV-related capacity or too many models aimed at a market that is not yet large enough to support them.

CNBC reported that GM has recorded $10.9 billion in EV-related charges since the second half of last year. A charge is an accounting hit that reduces reported earnings, often because a company is writing down assets, changing plans or recognizing costs tied to a strategic shift.

Those charges followed two pressures, according to CNBC: electric vehicle adoption has been slower than GM expected, and U.S. regulatory changes have eased emissions standards while removing support for EVs.

Gas production is getting more room

GM’s shift is not limited to Cadillac. CNBC reported that the automaker has also stepped back from EV plans across other brands and increased production of gasoline engines, including V-8 offerings.

Barra also repeated that GM plans to bring more manufacturing back to the U.S. starting next year. She said part of that plan includes expanding production of full-size SUVs to a Michigan plant that had previously been set for EV production.

GM’s full-size SUV family includes the Cadillac Escalade, Chevrolet Tahoe and Suburban, and GMC Yukon and Yukon XL. CNBC reported that those vehicles are currently built only at GM’s Arlington Assembly plant in Texas.

The production change matters because full-size SUVs are among GM’s major gasoline-powered nameplates. Adding Michigan capacity could give the company more flexibility for vehicles that still have customer demand, while EV demand develops at a slower pace than the automaker once expected.

GM’s latest Cadillac plan shows a more flexible approach: keep EVs in the lineup, but extend the life of gas vehicles where buyers are still showing up.

This story draws on original reporting from CNBC.