Cadillac, a name once synonymous with the chrome-laden, gas-guzzling land yachts of America’s past, is now leading the charge in the U.S. electric luxury vehicle market. In a turn that would have seemed improbable a decade ago, Cadillac has surpassed BMW, Mercedes-Benz, Audi, and Porsche in U.S. sales of electric luxury vehicles as of late August 2025, according to The New York Times. Nearly one in four new Cadillacs sold in the country is now electric, helping the brand achieve its strongest first half of the year since 2008.
“Cadillac has done an amazing job converting its traditional customers to E.V.s,” Sam Fiorani, vice president of AutoForecast Solutions, told The New York Times. This transformation is not happening in isolation. General Motors, Cadillac’s parent company, has more than doubled its electric vehicle (E.V.) sales in the first seven months of 2025 compared to the previous year, reaching 78,000 units. Meanwhile, Tesla’s sales fell 11 percent to 272,000 units in the same period, according to Kelley Blue Book data cited by The New York Times.
Cadillac’s electric push is not just about numbers. The brand is attracting a new, younger, and more tech-savvy customer base. About 70 percent of buyers for Cadillac’s electric Optiq and Lyriq models are switching from other luxury brands, and 10 percent previously owned a Tesla. “We’re in a position of great momentum,” said John Roth, Cadillac’s global vice president. “We offer more electric S.U.V.s than any luxury manufacturer, all with more than 300 miles of driving range.”
But this surge comes at a crucial moment. The federal government’s $7,500 tax credit for electric vehicle buyers is set to expire on September 30, 2025. This policy change has prompted a rush of consumers to purchase electric vehicles before the deadline. The experience in Germany, where electric vehicle sales dropped 27 percent in 2024 after the end of subsidies, serves as a cautionary tale for the U.S. market. Analysts warn that, without incentives, American buyers may gravitate toward hybrids, which often cost only slightly more than their gasoline counterparts.
General Motors and Cadillac are already preparing for this new reality. While the Escalade IQ, Cadillac’s flagship electric SUV, sold about 3,800 units in the first half of 2025, the traditional gasoline-powered Escalade outsold it by more than six times, with about 24,000 units. The Escalade IQ, a mammoth three-row SUV starting at around $130,000, boasts 750 horsepower and a driving range exceeding 450 miles. Yet, the V-8 gasoline Escalade, starting at $87,000, remains Cadillac’s cash cow. GM had planned to retire the gasoline Escalade but has now reversed course, opting to design a new version and extend its production into the next decade.
This balancing act isn’t unique to Cadillac. Most luxury automakers have backtracked on their plans to go fully electric in the near future. GM announced on August 28, 2025, that it would temporarily slow production of the Escalade IQ and GMC Hummer EV at its Detroit electric car factory through October 6. This facility also produces the electric Chevrolet Silverado and GMC Sierra pickups. Meanwhile, a Michigan factory initially slated for electric vehicle production will pivot to building gasoline Escalades and pickups starting in 2027.
“If 90 percent of the market wants an internal-combustion model, the easier sell is the vehicle that can generate profits,” Fiorani told The New York Times. “The gas-powered vehicles make the money, and the E.V.s bring them a new market. They’ll have to have both for a number of years now.”
Cadillac’s edge in the electric market comes from its U.S.-centric production and supply chain. All but one of its electric models are built in the United States, with the exception being the Optiq, which is made in Mexico. GM’s joint venture with LG Energy Solution has resulted in battery factories in Ohio and Tennessee, helping to lower costs and avoid some tariffs. The company is also investing in new battery technology, replacing some nickel and cobalt with manganese to reduce costs by more than $6,000 per battery, while maintaining a range of over 400 miles for its large SUVs and pickups.
But Cadillac’s ambitions don’t stop at the mainstream luxury market. The brand is making a bold play for the ultra-luxury segment with the introduction of the Celestiq, a custom-crafted electric limousine priced around $340,000. As reviewed by The Wall Street Journal on August 28, 2025, the Celestiq is positioned to compete against storied names like Rolls-Royce, Bentley, Aston Martin, and Maybach. Each Celestiq is largely hand-built, with buyers spending months commissioning bespoke models. One customer even opted for sen wood, a Japanese ash veneer reminiscent of midcentury bentwood furniture. The vehicle’s paintwork alone requires a dozen coats over two weeks, and 150 interior components are hand-wrapped and stitched.
“The Celestiq allows us to enter the ultraluxury segment, which Cadillac hasn’t been a part of for many, many years,” Roth explained. Cadillac has set up a special showroom, Cadillac House, in a Detroit building originally designed by famed architect Eero Saarinen, where customers can collaborate with design experts and see wall-sized digital renderings of their unique cars.
Not everyone is convinced GM can challenge the likes of Rolls-Royce and Bentley, especially given its track record with full-size pickups and high warranty and recall costs, as highlighted in The Wall Street Journal review. Still, Cadillac is determined to prove itself in this rarified air, betting that its electric craftsmanship and attention to detail will attract a new class of buyers.
International expansion is also on the agenda. Cadillac will join Formula 1 racing in 2026, becoming the first new team on the grid since 2016. The move comes with a hefty $450 million “anti-dilution” fee to compensate the ten existing teams, including Ferrari, Red Bull, and Mercedes, for sharing revenue. “You don’t do all that to sell Cadillacs to traditional buyers in the U.S.,” said Sam Abuelsamid, vice president of market research for Telemetry, to The New York Times. “You do it to sell Cadillacs everywhere.”
Cadillac’s international aspirations come as its sales in China have plummeted, with domestic automakers dominating the country’s electric vehicle market. Abuelsamid cautioned that Western automakers may never regain their former glory in China, but opportunities remain in the United States, Europe, and beyond—provided they keep investing in electrification. “If these automakers are going to be part of the global auto landscape, they have to have electrification, or they’re done,” he said.
As Cadillac navigates this crossroads—balancing gas and electric, luxury and ultra-luxury, domestic and global ambitions—it’s clear that the brand’s future will be shaped as much by innovation as by adaptability. The next few years will test whether Cadillac’s electric momentum can outlast shifting policies, changing consumer tastes, and fierce competition on every front.
