General Motors plans by 2030 through electric cars and subscriptions
Automakers General Motors(GM) and Ford(F) rose 4.7% and 5.5%. Over the past month, stocks of companies have added 14-15%, although the S&P 500 over the same period fell by 2.5%. For the year, the shares of GM and Ford brought in several times more profit than the broader market.
Companies are seriously looking forward to competing with Tesla for leadership in the electric vehicle market, and investors seem to love it. For example, General Motors held an Investor Day in the middle of this week. The company said it plans to double its annual revenues to $ 280 billion by 2030 and improve its profitability.
It is an aggressive target as the company’s sales have stagnated over the past ten years.
Like stocks: GM stocks rose 0% from late 2010 to early 2020. “We will achieve our goals through sales of classic, electric, and autonomous vehicles, software, high-margin services, and other new directions,” said the company’s CFO. According to GM forecasts, sales of electric vehicles will grow from $ 10 billion in 2023 to $ 90 billion in 2030.
As calculated in the company, by the end decade will bring in about 50 billion annually by the end of the decade. In addition, GM expects to earn 25 billion from subscription services by 2030. The automaker plans to increase profitability, among other things, through its production of batteries. GM will invest 35 billion in new technologies and production by 2025. According to the management, in 15 years, the company will produce only electric vehicles. Ford has a similar program: the auto company will invest 30 billion in electric cars over the same period.
At the end of September, Ford announced the construction of several battery factories in cooperation with South Korean SK Innovation. The company will spend about 7 billion on the McKinsey; in the second quarter of 2021, sales of electric vehicles grew 200% and accounted for 3.6% of total sales.
is still a bit small, but traditional carmakers must invest in development to not lose in a competitive industry. “Wall Street wants to see investment in electric vehicles in the next 2-4 years, not at the end of the decade.
Now there is an arms race. If companies are not aggressive enough, they will have to look after the likes of Tesla,” said one analyst at Wedbush Securities.
