General Motors plans to double its revenues 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 a Chevrolet crossover priced at $30,000.
GM also is looking to subscriptions for services such as its hands-free driving technology to drive recurring revenue and boost profit margins.
“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.”
The Detroit-based company reported $122bn in revenues in 2020 as it grappled with plant closures due to the pandemic, down from $137bn in 2019. 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 electric vehicles 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 new electric vehicles 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 electric vehicle manufacturing capacity so that half its plants in North America and China will be able to make them by the end of the decade.
Barra said the company could grow its share of the EV market in the US. Tesla currently dominates US sales, though EVs remain less than 3 per cent of the total domestic car market.
GM will be looking for new customers for at least some EV offerings. President Mark 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 the 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.