General Motors (GM) expects to double its annual revenue by the end of this decade, leveraging new software services built around increasingly electric vehicles. GM stock fell.
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At an investor event Wednesday, GM announced it’s targeting revenue of $280 billion by 2030 and profit margins of 12%-14%. That would be up from $122.5 billion in revenue and 8% margins in 2020.
Its plans rest on not just making cars and trucks, but also offering software services that generate recurring revenue.
“As our services go beyond the vehicle… GM will use its hardware and software platforms to improve the daily experience” of customers, CEO Mary Barra said during the event.
Barra pointed to multiple drivers of long-term growth. Those include, crucially, an ambitious rollout of electric vehicles, with more than 30 new EVs coming across the globe by 2035.
The auto giant took direct aim at Tesla (TSLA), boldly predicting it will surpass that rival in sales of electric cars.
A Chevy Silverado electric truck is set to debut Jan. 5, GM said. That comes as its high-end Hummer EV is set to begin deliveries before year-end. GM spoke of plans for a $30,000 Chevrolet electric crossover and an even more affordable option.
The company also announced Ultra Cruise, its next-gen, hands-free, driving-assistance technology. And it confirmed earlier reports that it expects Cruise subsidiary to deliver $50 billion in annual revenue by 2030, as it moves people and goods around in driverless vehicles and robotaxis.
The announcements further GM’s expansion into software-driven services that will generate new recurring revenues.
Eventually, GM sees software and services delivering an additional $20 billion-$25 billion in revenue a year. Those services will be higher margin, helping it achieve the new margin target, GM said.
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Shares of General Motors fell 0.75% to 53.85 on the stock market today, back below the 200-day line. GM stock continues to work on a 64.40 buy point from an 18-week, double-bottom base, which formed on top of a seven-week, cup-shaped based, according to MarketSmith chart analysis. The auto chip shortage and a Chevy Bolt EV recall have weighed on shares.
Ford (F) lost 1.2% Wednesday. Tesla (TSLA) rose 0.3% to 782.75 after hiking prices in the U.S. again.
Through 2025, GM plans to invest $35 billion in all-electric and autonomous vehicles, the company has previously said. By 2035, it expects to only produce electric vehicles, moving away from gas and diesel cars.
At its own investor event in May, Ford announced plans for a similar “expanded business model,” harnessing both actual vehicles and the software services built around them.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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