GM announces new gas-powered version of America's favorite SUV as EV boom turns bust

General Motors is pumping the brakes on its all-electric ambitions, announcing a new generation of gas-powered Cadillac models in a major strategy reversal as demand for electric vehicles continues to cool.

The Detroit automaker confirmed it will launch new internal combustion engine (ICE) versions of the Cadillac CT5 sedan, XT5 midsize SUV and the discontinued three-row XT6 SUV beginning next spring and continuing through 2028.

The move marks a dramatic U-turn for Cadillac, which previously pledged to become an all-electric brand by the end of the decade.

Speaking during GM's second-quarter earnings call, CEO Mary Barra said that starting next spring and continuing into 2028, 'we will begin launching the next generation of Cadillac ICE vehicles.'

The gas-powered lineup will sit alongside Cadillac's expanding range of electric crossovers and EV versions of its flagship Escalade SUV.

The announcement is the latest sign that America's biggest automakers are rethinking their electric vehicle strategies after EV demand failed to grow as quickly as many had forecast.

GM revealed it has recorded $10.9 billion in EV-related charges since the second half of 2025, blaming slower-than-expected consumer adoption as well as changes to US regulations that have relaxed emissions standards and rolled back government support for electric vehicles.

Instead, the company is doubling down on one of its biggest money-makers: large gasoline-powered SUVs.

Barra also confirmed GM will begin expanding production of full-size SUVs - including the Cadillac Escalade, Chevrolet Tahoe, Chevrolet Suburban, GMC Yukon and Yukon XL- to a Michigan factory that had originally been earmarked to build electric vehicles.

The shift means the vehicles will no longer be produced exclusively at GM's Arlington Assembly plant in Texas.

For years, Cadillac had been positioned as the luxury spearhead of GM's EV future. 

The company had repeatedly said the historic brand would sell only electric vehicles by 2030.

Instead, the automaker is now embracing what many analysts describe as a more flexible approach, offering buyers both electric and gasoline-powered models while the EV market continues to mature.

GM's rethink comes amid a tougher environment for electric cars. 

Tariffs on imported battery components have increased production costs, while Washington has also pulled back EV incentives and proposed new annual registration fees for electric vehicle owners, further denting demand just as sales growth has begun to slow. 

Reaction online suggested many drivers were not surprised by GM's decision.

On Reddit, one user wrote: 'The yo-yoing of national intent and direction on what to fuel cars with is a no-win situation. Money is being burnt chasing that yo-yo, with jobs along with these motions.'

Another commenter argued that automakers should simply offer both technologies, writing: 'There should be no problem building EVs and ICE. Plenty of demand for EVs everywhere.'

Others suggested the company's electric rollout had missed the mark.

'I thought they were going to start with a rollout of high-end luxury EVs,' one Reddit user wrote. 

'Instead we got a 2-3 year delay, the Blazer EV and expensive electric trucks.'

Despite the renewed focus on gasoline-powered vehicles, GM insists it is not abandoning electric cars altogether.

Instead, the company says it will continue investing in EV technology while adjusting production plans to better match real-world consumer demand - a significant shift from the aggressive electrification roadmap it outlined just a few years ago.