GM hopes to double revenue by 2030 by selling electric vehicles and services
WARREN, Michigan – General Motors has spent billions of dollars in recent years to electrify its cars and trucks, as it tries to catch up with Tesla.
Now the company, which has announced plans to stop selling gasoline vehicles by 2035, is starting to reveal how well it expects the bet to pay off.
The automaker said on Wednesday it aims to roughly double its annual revenue by 2030, to around $ 280 billion. It relies on new trucks and electric cars for much of the growth while adding new revenue streams from software and services.
“When you look at all of the investments we’ve been making for over five years, this is what positions us to be truly in execution mode,” GM chief executive Mary T. Barra told reporters in her report. technical center north of Detroit for an investor presentation day.
While he expects modest growth in sales of gasoline-powered vehicles, electric cars are “a tremendous opportunity for growth,” she said. GM also hopes to develop carpooling services using self-driving cars, create insurance products, and expand its defense outsourcing work.
“It will really allow us to achieve that revenue doubling effect,” Ms. Barra said.
If GM’s strategy has a target, it’s Tesla, the dominant maker of electric cars and by far the world’s most valuable automaker. Tesla’s market capitalization, nearly $ 800 million, is about 10 times that of GM.
In the three months that ended in September, Tesla delivered 241,000 cars worldwide. That’s a lot more than what GM sells in an entire year.
Ms Barra did not mention Tesla in her presentation, but made it clear that GM was targeting the upstart automaker. “We want to be the No. 1 electric vehicle market share in the United States,” she said.
Ford Motor, Volkswagen and other established automakers are also investing billions of dollars to develop electric vehicles. Ford has started selling the Mustang Mach-E, an electric sport utility vehicle, this year, and looks set to beat GM in the market with an electric pickup, the F-150 Lightning, which goes on sale next spring.
Several start-ups are also hoping to sell electric cars. Among them are Rivian, which started making an electric pickup truck last month, and Lucid Motors, which says it will start selling a luxury electric sedan this month.
In its presentation, GM gave a preview of an electric version of its popular Chevrolet Silverado pickup truck. The truck will have a glass roof and will be able to steer with its four wheels, not just the front two, the company said. Executives would not say when it will go into production.
The electric Silverado will be built at GM’s Hamtramck plant in Detroit, alongside a GMC Hummer electric SUV, which the company plans to start selling by the end of this year. GM will add the Cadillac Lyriq, an electric SUV, next year.
He also said he is working on a new version of his Super Cruise driver assistance system that will allow hands-free driving on local roads and recognize traffic lights and stop signs. Dubbed Ultra Cruise, the new version will compete with Tesla’s autopilot system.
Autopilot, which allows cars to steer, brake and accelerate on their own, received praise from Tesla fans, but it was also found to not brake for stopped vehicles, resulting in accidents and fatalities. Federal regulators are investigating 12 cases in which Tesla running on autopilot crashed into police cars and other emergency vehicles.
GM’s Ultra Cruise is slated for release in 2023 for use on two million kilometers of roads in the United States and Canada. Super Cruise currently only operates approximately 200,000 miles of major highways.
The company has announced plans to introduce 30 new electric vehicles to the world by 2025, including 20 in the United States.
To support its ambitions, GM plans to allow half of its factories in North America and China to produce electric vehicles by the end of the decade. It is already converting five North American factories to manufacture such cars and is building two battery factories, in Lordstown, Ohio, and Spring Hill, Tenn.
On a related note, Ford recently announced that it will build three battery factories and a new electric truck factory in Kentucky and Tennessee.
GM relies on new business for much of its growth. The company is working to bring vehicles and other products to the U.S. military and is preparing to introduce electric delivery vans. It also strives to offer insurance through its navigation and accident response service OnStar, as well as a ride-sharing service provided by self-driving cars from Cruise, an affiliate.
Cruise tested a driverless taxi service in San Francisco, where he is based. During the presentation to investors, GM executives said they believed a self-driving taxi service could eventually turn into a $ 50 billion business.
“We hope to be able to develop this business very quickly,” said Dan Ammann, Managing Director of Cruise.
GM expects to make more money from software and services because they typically have higher profit margins than cars.