To people who remember gas-guzzling land yachts with tail fins, Cadillac isn’t the brand that springs to mind when they think of electric cars.
Yet, thanks to a wave of new models, Cadillac has passed BMW, Mercedes-Benz, Audi and Porsche in U.S. sales of electric luxury vehicles. Nearly one in four new Cadillacs sold in the country is now electric, leading the brand to its strongest first half of the year since 2008.
“Cadillac has done an amazing job converting its traditional customers to E.V.s,” said Sam Fiorani, the vice president of AutoForecast Solutions.
Along with Chevrolet, Cadillac has helped its parent company, General Motors, rise to the No. 2 spot in E.V. sales behind Tesla. In the first seven months of the year, G.M. more than doubled its E.V. sales compared with a year earlier, to 78,000, while Tesla’s sales fell 11 percent to 272,000, according to Kelley Blue Book.
A once-stodgy brand that struggled to lure younger, tech-savvy car buyers, Cadillac is increasingly drawing customers from Tesla and other brands. About 70 percent of electric Cadillac Optiq and Lyriq buyers are switching from other luxury brands, according to G.M., and 10 percent of them previously owned a Tesla.
“We’re in a position of great momentum,” said Jon Roth, the global vice president of Cadillac. “We offer more electric S.U.V.s than any luxury manufacturer, all with more than 300 miles of driving range.”
But that momentum will soon be tested. Sales of electric vehicles, which were already slowing before President Trump took office, could now tumble as the federal government dismantles Biden-era climate policies designed to get more people to buy such cars in an effort to reduce greenhouse gas emissions.
The Trump administration has raised tariffs on imported cars and auto parts. And Republicans in Congress have repealed a federal tax credit of up to $7,500 available to people who bought or leased electric vehicles. Consumers are racing to snap up electric models before the credit ends on Sept. 30. Sales could be much lower for many months after that, based on what happened in other countries that made similar policy changes. In Germany, electric sales dropped 27 percent in 2024 after subsidies ended.
Analysts said Cadillac and other brands would have to figure out how to sell electric models entirely on their merits. American buyers who previously would have considered electric models might now opt for hybrids, many of which cost only a little bit more than gasoline cars. U.S. automakers could try to sell more electric cars overseas, but may struggle to compete with cheaper Chinese models.
As a result, many carmakers, Cadillac among them, are leaning more heavily on gasoline models.
“The gas-powered vehicles make the money, and the E.V.s bring them a new market,” Mr. Fiorani said. “They’ll have to have both for a number of years now.”
Among Cadillac’s electric S.U.V.s, the Escalade IQ may especially underscore the industry’s balancing act between electric and gasoline models. For more than 25 years, the gas Escalade has been Cadillac’s status symbol and cash cow. The Escalade IQ is even more of a mammoth, but it is also more powerful, innovative and luxurious, with 750 horsepower and a driving range of more than 450 miles.
G.M. sold about 3,800 Escalade IQs in the first six months of the year, a strong showing for a three-row S.U.V. that starts around $130,000. But the gas Escalade, which is powered by a V-8 engine and starts at about $87,000, found more than six times as many customers, with about 24,000 sales.
Mr. Fiorani said G.M. had planned to retire the gasoline Escalade. Now it will design a new version and extend its life well into the next decade. A General Motors factory in Michigan that was slated to produce electric vehicles will instead build gasoline Escalades and G.M. pickups beginning in 2027.
“If 90 percent of the market wants an internal-combustion model, the easier sell is the vehicle that can generate profits,” Mr. Fiorani said.
G.M. is even pulling back on its E.V. output. The company announced on Thursday that it would temporarily slow the production of the Escalade IQ and GMC Hummer E.V. at its all-electric car factory in Detroit through Oct. 6. That factory also produces the electric Chevrolet Silverado and GMC Sierra pickups.
Nearly every luxury brand that had vowed to go fully electric in the coming years has backtracked. But Mr. Roth said no prudent business could ignore a huge shift in the market.
“It’s not an abandonment of the strategy whatsoever,” he said. “E.V.s are still foundational to what we’re doing, because they’re fantastic to drive. The range, infrastructure and battery tech continue to grow and improve.”
Mr. Fiorani said there were now too many electric models chasing too few customers. The automakers that do well in the next few years will be those that produce most of their electric cars and key components, like batteries, in the United States. They will also have to find ways to reduce production costs and offer cars for lower prices.
Some Cadillac competitors have already called timeout. Genesis, the luxury brand of Hyundai Motor, is pausing the production of its slow-selling electric GV70 S.U.V. in Alabama. Range Rover has postponed an electric S.U.V., and Mercedes has paused the U.S. production of its EQS and EQE electric S.U.V.s because of sluggish sales.
Mr. Roth said Cadillac and G.M. were not as vulnerable as European or Asian luxury carmakers to tariffs and the loss of the federal tax credit. All but one of Cadillac’s electric models are built in the United States. The exception is its most affordable model, the Optiq, which starts at $54,390 and is made in Mexico.
G.M. set up two battery factories, in Ohio and Tennessee, through a joint venture with LG Energy Solution. Those plants have lowered G.M.’s costs and have helped it avoid some tariffs. These investments have helped them maintain or lower the prices of its electric vehicles.
“If the industry around luxury E.V.s does get smaller,” Mr. Roth said, “I fully expect that Cadillac will get a larger share of that portion.”
G.M. is also hoping to lower costs further in the coming years by producing batteries that use less nickel and cobalt, two expensive raw materials found in most electric vehicle batteries made in the United States.
One of the approaches that G.M. is pursuing replaces some nickel and cobalt with manganese. The company has said this could lower battery costs more than $6,000 while still allowing its large S.U.V.s and pickups to drive more than 400 miles on a full charge.
Cadillac is also trying to move into the more rarefied world of cars that sell for several hundred thousand dollars. It has recently started selling the Celestiq electric sedan, which aims to steal customers from companies like Rolls-Royce.
The roughly $340,000 Celestiq is largely hand-built by a team of skilled craftspeople from G.M.’s prototype department. Buyers typically spend a few months commissioning a bespoke model that ensures no two Celestiqs are alike. A dozen coats of paint take two weeks to apply, and 150 interior components are wrapped and stitched by hand. For the back seats, one customer chose sen wood, a Japanese ash whose fine-grained veneer mimics the style of an Eames lounge or other midcentury bentwood chair.
Customers can collaborate with design experts and see wall-size digital renderings of their car at Cadillac House.This special showroom occupies a suburban Detroit building originally designed by Eero Saarinen, the midcentury architect who created G.M.’s Tech Center campus.
The Celestiq “allows us to enter the ultraluxury segment, which Cadillac hasn’t been a part of for many, many years,” Mr. Roth said.
Cadillac is also trying to make itself more international. One way it’s doing so is by joining Formula 1 racing next year. Cadillac will become the first new team on the F1 grid since 2016. The move comes at a cost: Cadillac will pay a $450 million “anti-dilution” fee to compensate 10 other teams, including Ferrari, Red Bull and Mercedes, for revenue they will now have to share with Cadillac.
“You don’t do all that to sell Cadillacs to traditional buyers in the U.S.,” said Sam Abuelsamid, the vice president of market research for Telemetry. “You do it to sell Cadillacs everywhere.”
Until recently, Cadillac was selling more cars in China than in the United States, but those sales have withered as Chinese automakers have become a dominant force in electric vehicles.
Mr. Abuelsamid said G.M. and other Western automakers might never recapture what they had in China, but they can still do well in the United States, Europe and other places. But to succeed, he said, carmakers will have to keep investing in electric vehicles and not just rely on gasoline models.
“If these automakers are going to be part of the global auto landscape,” Mr. Abuelsamid said, “they have to have electrification, or they’re done.”
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