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General Motors has a robust plan to scale its EV production before 2023 while looking at the long-term plan of producing an all-EV fleet by 2035.
American automotive multinational corporation General Motors Company (NYSE: GM) has unveiled its ambitious plan to double its revenue base by embracing full-blown electric vehicle production and subscription-based after-sales services, the business models that are similar to those of Tesla Inc (NASDAQ: TSLA).
The average revenue General Motors records are currently pegged at about $140 billion, going by the results from the past few years. Going by its projections, it wants to rake in $280 billion by the end of the decade, while also pushing its operating profit margins to a range of 12% to 14%. The outbreak of the coronavirus pandemic pushed the company’s revenue to be pegged at $122.5 billion in 2020, down 10.8% compared with the 2019 figure.
While General Motors is commencing a two-day investor meeting in which it will detail its plans to investors on how to achieve this, the firm noted it has been making the necessary investments to set the ball rolling.
“When you look at all of the investments we’ve been making for five years plus, that’s what positions us today to really be in execution mode,” GM CEO and Chair Mary Barra told reporters during a briefing ahead of the event. “We have great confidence in our ability to grow revenues.”
General Motors has the target to become one of the largest electric vehicle manufacturing firms, with targets to develop its battery technology. Amongst the plans to double its revenue as projected is the switch to software subscription-based services amongst others. While the company hopes to see a moderate growth trend in its traditional businesses, it anticipates incremental growth in the new service businesses respectively.
“Especially in the initial days, we see EVs being plus volume, so we see tremendous opportunity to grow from an EV perspective and then the subscription and services,” she said.
GM stock is trading in the positive following the company’s ambitious revenue projections. The shares are up 1.71% in the Pre-Market and are trading at $54.85 each.
Taking on Industry Giant: Motivation for General Motors Revenue Projection
The Detroit-based company has a robust plan to scale its EV production before 2023 while looking at the long-term plan of producing an all-EV fleet by 2035. The company plans on increasing its production capacity with hopes that about 50% of its plants in North America and China can produce electric vehicles. The company plans to add three more plants to the current two that can manufacture EVs in North America.
In addition, there are confirmations from top company executives that the firm is on track to announce a second assembly plant for battery-electric trucks. The company’s first EV pickups, including the upcoming GMC Hummer, will be produced at a plant in Detroit.
“No one is going to be able to touch us in the battery-electric truck space,” GM President Mark Reuss told reporters Wednesday. “You’re going to see that we have hit the mark on those.”
General Motors is also rebranding its self-driving capabilities with plans for the autonomous driving systems to take a chunk of the earmarked $35 billion designated to be invested in product development through 2025. By range, the company’s new ‘Ultra Cruise’ self-driving system will cover 2 million miles of road in the US and Canada, a massive boost when compared to the current Super Cruise system which only covers 200,000 miles.