General Motors beat earnings expectations on both revenue and profit in the second quarter. The stock rallied nearly 5% on the news. For an automaker, that’s a win worth attention.

Detroit has been under pressure. EV transition costs are real. Chinese automakers are gaining market share. Supply chains are unstable. GM had to prove it could navigate all three headwinds at once.

How GM Pulled It Off

GM is making money on combustion engines while investing heavily in EVs. The company raised EV production and delivered more units than expected. Pickup trucks—profitable segments—performed well. Margin expansion came from operational efficiency and pricing power.

The company is also benefiting from stronger-than-expected demand for its Cadillac luxury lineup. Cadillac margins are wider. Higher-end vehicles sell at better prices.

The EV Question

GM has been criticized for slow EV adoption compared to Tesla and other pure-play EV makers. But the company has also been cautious about profitability. GM is not chasing EV volume at a loss. It’s building EV profitability from the start.

That strategy seems to be working. The company is hitting production targets without cannibalizing margins.

The beat suggests that Wall Street’s pessimism on legacy automakers may have been overdone. GM is proving it can compete in an EV world while still printing cash from combustion engines.

GM’s earnings show that Detroit isn’t dead. It’s just slower to move than Tesla. That doesn’t mean it can’t win.