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GM says it will double revenue by 2030 with EVs, hands-free driving, tech services

Crain’s Detroit Business¬†
Oct. 6, 2021
David Welch

General Motors Co. plans to double its revenue by 2030 as the Detroit-based automaker expands its electric-vehicle lineup, builds out an autonomous ride-sharing business offered by Cruise LLC and pushes into subscription-based services in its cars.

GM plans to reach that ambitious growth target while also expanding margins even as it shifts toward electric vehicles, the company said Wednesday in a presentation to investors. The company said that some of the new businesses, like its Super Cruise hands-free driving service, could have higher margins than selling cars and will drive bigger profits. The automaker brought in $122 billion in revenue last year.

The plan marks a new phase for CEO Mary Barra, who spent the first four years of her tenure in the top job closing down unprofitable operations and exiting the money-losing European market. She then took those savings and invested in Cruise and earmarked $35 billion for the Ultium battery program and for electric and autonomous vehicles.

“In 2016, we bought Cruise. Around the same time we were working on Super Cruise and you see how that’s progressed today. We started on Ultium over three years ago and now have vehicles coming off of that,” Barra told reporters in a roundtable discussion. “When you look at all the investment we’ve been making for five years plus, that’s what positions us today to be in execution mode.”

Investors have been receptive to that message, lifting the Detroit-based carmaker’s shares by about 30 pecent this year to their highest levels in a decade.

Expanding in EVs
In the presentation, GM laid out how it will increase revenue in key areas. With electric vehicles, the company showed high-volume models that will follow the more exclusively priced Hummer EV and Cadillac Lyriq SUV.

The company presented a battery-powered crossover SUV from Chevrolet that will be priced under $30,000, new Buick models, trucks from GMC and the ultra-luxury Cadillac Celestiq electric sedan. GM will show the electric Silverado-E pickup at CES, formerly known as the Consumer Electronics Show, in Las Vegas in January.

GM President Mark Reuss said GM will also offer an electric version of GMC’s Sierra pickup truck. Electric pickups are an area in which GM sees an opportunity to gain market share, because buyers of electric pickups are different than today’s core truck buyer.

“We don’t have a dome that’s big enough for the pipeline of all the vehicles we’re working on,” Reuss said.

GM said 50 percent of its plants will be capable of making EVs by 2030. That will enable its factories to make internal combustion vehicles as well as battery-powered models and shift production at the rate at which the market switches to plug-in models.

Cruise growth plans
Cruise CEO Dan Ammann is scheduled to give an update on that business, including discussing its plans to reach $50 billion in revenue and how the company, which is majority-owned by GM, will make its ride-hailing services profitable. The startup plans to start offering ride-hailing services and charging fares in the next two years.

GM also announced the next phase of its semi-autonomous driving system Super Cruise. The new version will be called Ultra Cruise and will be usable on 2 million miles of U.S. and Canadian roads. The system is designed to let drivers go hands-free in 95 percent of driving conditions, including urban areas, suburban streets and rural routes.

Ultra Cruise will be offered on GM’s high-end models, the company said. Both Ultra Cruise and Super Cruise will be paid subscription services.

The automaker also plans to develop apps and services to build revenue from its vehicle owners. The company will have connected services in the car that are built off its Ultifi software platform.

“When we modeled all the growth opportunities we have, think of some of the services and subscription businesses that have very different margin profiles,” Barra said. “That’s what enables us to improve our margins while we go through this transition.”

Barra said that vehicles have so much computing power now that the company can offer a lot of services to consumers to bring in new revenue. GM will also be selling hydrogen fuel cell vehicles to the locomotive and defense industries.

In the roundtable discussion, Barra made a bold claim that GM will be able to be the market share leader in electric vehicles, which means overtaking Tesla Inc. She said GM has many more nameplates coming and a huge dealer network to help it build sales.

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