What’s going on?
General Motors (GM) said earlier this week that it’s planning to double its revenue by 2030, and America’s biggest carmaker knows exactly where it has to go to make that happen.
What does this mean?
Carmakers the world over have been rushing to make electric vehicles (EVs) for an increasingly eco-conscious customer, and GM is no different: the company pledged in June to spend $35 billion on EVs by 2025, as well as to stop making traditional cars completely by 2035. It reckons that shift will boost its EV revenue from $10 billion in 2023 to $90 billion in 2030.
And it’s not stopping there: GM thinks it’ll earn $80 billion from its other new businesses too, including self-driving cars and subscription services like breakdown cover. Put it all together, and the company’s hoping to hit $280 billion in sales by the end of the decade.
Why should I care?
For markets: Investors are digging GM.
GM’s stock is up 40% this year versus the US stock market’s 20%, and that rally might not be over anytime soon. For one thing, the introduction of subscription services will boost the firm’s profits, since they boast higher margins than cost-heavy car sales do. And for another, the push toward EVs will appeal to an investor base that’s investing more and more in sustainable companies.
The bigger picture: GM’s taking Tesla’s lead.
GM sold 10 times more cars than Tesla last year, but it’s still valued at 10 times less than the EV market leader – mostly because Tesla is treated as a high-growth tech company rather than a carmaker. GM, then, is reportedly trying to rebrand as a “tech-enabled mobility” firm, and it started by introducing a new in-car software platform on Thursday. But since it could take years to compete with Tesla on its own turf, GM’s planning to move into robotaxis and self-driving delivery services in the meantime – both areas Tesla hasn’t tried yet.
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Originally Posted on October 7, 2021 – Detour De Force
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