DETROIT — General Motors plans to double its annual revenue to $280 billion by the end of this decade as it transitions to all-electric vehicles and diversifies its operations beyond selling cars and trucks.
The automaker announced the new revenue target, along with fatter projected operating profit margins of 12% to 14%, on Wednesday ahead of investor presentations in which it detailed how the company plans to hit those targets through traditional automotive operations and new software- and data-focused businesses.
The revenue goal is based on a rolling average of about $140 billion for the automaker in recent years, a company spokesman said. GM’s revenue last year was nearly $122.5 billion, down 10.8% compared with 2019 thanks largely to factory shutdowns at the beginning of the coronavirus pandemic. Its operating profit margin was 7.9% in 2020.
“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.”
The two-day investor meeting, including product test drives on Thursday, is meant to provide a “clear strategy” to persuade investors to value the company more like a technology start-up such as Tesla, which is valued at more than $750 billion, compared with $79 billion for GM.
Barra said GM expects much of the revenue growth to come from its new and service-based businesses, with “moderate growth” from its traditional vehicles and operations.
“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.
The automaker expects its traditional business of auto sales and financing to increase to between $195 billion and $235 billion a year, up from $138 billion. Its new businesses such as autonomous vehicle subsidiary Cruise and BrightDrop commercial EV business is targeted to grow from $2 billion, largely from OnStar, to $80 billion during that time frame.
GM also confirmed plans to rapidly scale its electric vehicle manufacturing, with more than 50% of North America and China plants capable of producing the vehicles. Only two GM plants in North America are capable of producing electric vehicles currently, but it has announced plans to transition at least three others by 2023.
GM President Mark Reuss told investors Wednesday the company will soon 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.
The automaker is in the process of investing $35 billion in electric and autonomous vehicles through 2025, as it aims to become an all-electric automaker by 2035.
GM said it plans to surpass Tesla as the U.S. leader in EVs, but Barra and Reuss declined to disclose a time frame. The company has said it expects to sell 1 million EVs a year globally by 2025.
During the event, GM also is expected to better detail that transition as well as how it plans to commercialize driver-assist systems and autonomous vehicles.
GM on Wednesday confirmed it will unveil its new electric Silverado at CES in January. It also said a Chevrolet crossover for around $30,000 is in the works. GM did not release on-sale dates for the vehicles.
“No one is going to be able to touch us in the battery-electric truck space,” Reuss told reporters Wednesday. “You’re going to see that we have hit the mark on those.”
On self-driving technology, GM said that in 2023 it will release a new hands-free system called “Ultra Cruise” that is capable of driving in 95% of scenarios. The system is expected to be far more capable than its current Super Cruise system, which is exclusively available on premapped divided highways.
At launch, GM said, Ultra Cruise will be available on more than 2 million miles of road in the U.S. and Canada. Super Cruise is currently available on more than 200,000 miles of road.
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