General Motors plans to double its revenues to $280bn by 2030 while increasing profit margins as the company steers away from manufacturing petrol-powered cars towards electric vehicles.
The largest US carmaker said that it would achieve sales growth by building EVs using common parts and its Ultium battery to produce a broad portfolio of vehicles, including high-volume models such as an electrified Chevrolet Equinox, a crossover that will be priced at $30,000.
GM projects revenue from EVs will grow from $10bn in 2023 to $90bn in 2023, said Paul Jacobson, chief financial officer. The company forecasts profit margins by the end of the decade between 12 and 14 per cent.
The company said it would add another $80bn in revenue from new businesses, such as its autonomous driving subsidiary Cruise, and from subscriptions for services like car insurance or roadside assistance.
“We see moderate growth with the current portfolio when you look at our [internal combustion engine] vehicles and then our automotive financing,” Mary Barra, chief executive, said on Wednesday. “Initially, we see EVs being less volume, so we see tremendous opportunity to grow from an EV perspective, and then subscription and services.”
GM averaged $140bn in revenue over the past five years, Jacobson said. In the second quarter of this year GM reported an operating profit margin of 12 per cent.
The automotive industry is struggling to pivot toward manufacturing EVs after decades of focus on vehicles with fuel-burning engines. GM already has committed to spending $35bn on EVs by 2025, with plans to no longer make cars, trucks and vans powered by petroleum products after 2035.
The company has said it planned to launch 30 EV models globally, with the aim of selling 1m electrified cars and trucks a year in the US and China by 2025.
At its investor day on Wednesday, GM disclosed plans to increase EV manufacturing capacity so that half its plants in North America and China will be able to make them by the end of the decade.
The company’s pitch to investors hinges on what it calls a “dual platform” strategy: Ultium batteries resting on a skateboard-style chassis, and Ultify, GM’s new software platform.
The uniform battery and chassis can be topped with any type of vehicle, from a mass market car to a luxury truck, yielding “huge economies of scale . . . as we go into production”, said Mark Reuss, GM president.
The uniform software platform, for petrol-powered and EVs, would allow for over-the-air technology updates and purchasing services, GM said. Barra compared the mix of hardware and software to smartphone technology.
She said GM could grow its share of the US EV market that is dominated by Tesla. EVs remain less than 3 per cent of the overall domestic car market.
GM will be looking for new customers for at least some EV offerings. Reuss said the electrified Chevrolet Silverado pick-up, to be officially unveiled in January, “is going to be positioned very differently than our current [internal combustion engine] Silverado. Those are very different vehicles; they’re very different customers. Still truck customers, but customers for the future of what trucks look like.”
Barra and Reuss said advances in the company’s hands-free driving technology would be among the subscription services powering GM’s revenue and profit goals.
The company called Ultra Cruise “a significant step” forward, saying the technology could pilot vehicles in “95 per cent of driving conditions” when it is launched next year. The current version of the technology costs customers $25 a month.
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