DETROIT, Oct.6 (Reuters) – General Motors Co (GM.N) chief executive Mary Barra told investors on Wednesday that the automaker plans to double revenues by 2030, boosting profits from vehicles at combustion while deploying new electric vehicles and new digital vehicles. services powered to catch up with Tesla Inc (TSLA.O).
GM said if this were successful, annual revenue by 2030 would be around $ 280 billion and the automaker would be the leader in electric vehicle sales in the United States. CFO Paul Jacobson said GM expects pre-tax profit margins of 12-14%, which could beat current levels. This would imply annual pre-tax profits of up to $ 39 billion. Read more
Jacobson said GM can fund $ 9 billion to $ 10 billion in annual capital spending on electric vehicles and other initiatives while returning money to shareholders.
“It’s not all going to happen at the same time,” Jacobson said.
GM predicts that its combustion vehicle business can grow even though annual revenue from electric vehicles will reach $ 90 billion by 2030, from $ 10 billion projected in 2023, Jacobson told investors after the markets closed. The company also plans to add $ 80 billion in new businesses such as the Cruise autonomous vehicle transportation service by 2030.
Barra has campaigned to convince investors that General Motors can surpass Tesla in terms of technological development and profitability as the auto industry navigates the deepest technological revolution since the mass-produced Ford Model T. She and other GM executives began a two-day series of presentations. to investors at the automaker’s technical center in Warren, Michigan.
They said GM can transform “from automaker to platform innovator” – a reference to Silicon Valley digital platform companies such as Apple Inc which have much higher stock valuations than GM and ‘other historic car manufacturers.
Barra took over as GM in 2014 and, at one point, nearly doubled the share price from a narrow band around its initial public offering price of $ 33 in 2010. The shares have rose Wednesday after the close at $ 53.93.
Still, GM’s market cap of around $ 78 billion remains far behind Tesla’s $ 773 billion market cap, reflecting investor skepticism that GM can match the battery and software prowess of Tesla. You’re here.
Barra and GM Chairman Mark Reuss have laid out a plan to transition to an all-electric fleet by 2035 that starts gradually, then accelerates after 2030, when more than half of GM’s factories in China and in North America will be “capable of producing electric vehicles.” . “
GM has said it aspires to produce only electric vehicles by 2035. Reuss said it will depend on the “agility” of GM factories, which will build both combustion vehicles and electric vehicles.
“We want to take the whole workforce with us,” Barra said. She and Reuss insisted that GM’s current workforce and factories are assets, not liabilities. Electric vehicle startups are building new factories at great expense, she noted, when GM already has the plants and people it can reuse.
In 2022, GM plans to launch an electric version of its best-selling North American model, the Chevrolet Silverado pickup truck. Barra will unveil it at the CES tech show on Jan.5, GM said. Suppliers have said the vehicle will be launched in late 2022.
“No one will be able to touch us in the electric truck space,” Reuss said.
Ford Motor Co (FN), which is set to beat GM in the market with the battery-electric Ford F-150 Lightning early next year, recently announced that it will double the capacity of the Lightning at its factory in Dearborn, Michigan. Ford plans even more production of electric F-150s at a planned complex in Tennessee. Startup Rivian began production of its electric pickup last month.
Tesla has delayed the launch of its futuristic Cybertruck.
GM executives were careful not to make a firm commitment to ditch internal combustion vehicles by 2035, saying it would depend on market demand and government policy.
Yet GM’s adoption of electrification has won over investors increasingly concerned about climate change. On Monday, the Engine No. 1 hedge fund said GM has carved out a leadership position in battery technology and has plenty of growth to come. Read more
GM also aims to increase the profits of internal combustion vehicles, such as large Chevrolet Silverado SUVs such as the Cadillac Escalade.
Barra expressed confidence that GM can create cost-effective, higher-margin software services and attract new customers with electric vehicles, like a $ 30,000 Chevrolet wagon electric crossover.
GM is the majority owner of autonomous vehicle services company Cruise, and predicts the company to generate $ 50 billion in annual revenue by 2030. Cruise last week received licenses in California to begin accepting passengers , although it cannot yet charge for rides. Read more
GM is also investing in the BrightDrop e-commerce delivery unit and the insurance offered through its telematics brand Onstar. In total, GM said it manages 20 startups to develop new lines of business.
Tesla’s impact was obvious. GM has said that by 2023 it will offer a new version of its Ultra Cruise hands-free driving system that uses sensors to enable hands-free driving in “95% of all driving scenarios.”
Tesla chief executive Elon Musk has made similar statements for future versions of the electric automaker’s autopilot technology.
Reporting by Joe White and Ben Klayman, additional reporting by Paul Lienert Editing by Nick Zieminski and David Gregorio
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