Highlights of General Motors Investor Day

DETROIT – General Motors gave investors a detailed overview of its financial operations on Wednesday, describing how the automaker plans to increase profit margins and double revenues to around $ 280 billion by the end of this decade.

To achieve these ambitious goals, GM CEO Mary Barra and her management team plan to transition the traditional automaker to what they call a “platform company,” leveraging its core construction and sales of cars to develop and grow “beyond the vehicle”. “

“General Motors provides the technologies that redefine the way people and goods are moved,” Barra said Wednesday at GM’s technology campus in suburban Detroit on the first day of a two-day investor event. “Our commitment to a vision of a world with zero accidents, zero emissions and zero traffic congestion has put us ahead of much of the competition.”

Investors were not immediately impressed by GM’s announcements during the five-hour plus event. Shares of the automaker closed Wednesday down less than 1% at $ 53.93 per share. Shares rose about 2.5% Thursday morning to $ 55.25 per share.

GM chief financial officer Paul Jacobson said he was not worried about the lack of movement in the share price. He said the company wanted to make its plans clear, some of which may have been lost by investors with the coronavirus pandemic and the global shortage of semiconductor chips.

“We’re obviously putting a lot on the market today, and I think they’re going to handle it, but we’re very, very confident,” he told reporters in a briefing. “We didn’t go out today to move the stock price today, we went out today to really make sure people understand the mindset of what we have here.”

Along with revenue growth, here are some other numbers investors should keep in mind as GM tries to execute its plans.

GM plans to increase its operating profit margin between 12% and 14% by 2030. This is against 7.9% in 2020.

Much of Wednesday’s investor day was spent expanding the business to generate recurring revenue based on software and services.

GM targets revenue growth from operations such as OnStar as well as new businesses such as its majority-owned autonomous driving subsidiary Cruise and the BrightDrop electric vehicle business unit from $ 2 billion to $ 80 billion by 2030.

Most of that additional new revenue is expected to be in the second half of this decade, GM said.

GM predicts that electric vehicle revenues will grow from around $ 10 billion in 2023 to around $ 90 billion per year by 2030 as the company launches new models, including at least 30 new electric vehicles by 2025 .

GM’s annual capital spending, including investments in joint ventures to build battery factories, is expected to be between $ 9 billion and $ 10 billion over the medium term as the company shifts to a majority EV product portfolio.

GM said it plans to fund these investments entirely through internally generated funds.

As part of GM’s drive to increase recurring revenue, the automaker plans to offer remote upgrades for its vehicles.

They should range from hands-free driving technologies to increased performance for things like a “0-60 acceleration software upgrade,” according to Alan Wexler, senior vice president of innovation and growth at GM.

To increase the availability of electric vehicle chargers – a major barrier to owning electric vehicles – GM plans to invest approximately $ 750 million in devices by 2025. This includes charging at home, at work and in public at home. United States and Canada, said GM.

Cruise CEO Dan Ammann said the majority-owned autonomous driving subsidiary plans to start charging for axis robots in autonomous vehicles in San Francisco by 2022, pending state approval.

The company last week secured the fifth of six permits needed to market a fleet of autonomous vehicles in the state.

Cruise is targeting a fleet of at least 1 million autonomous vehicles by 2030, according to a slide presented by Ammann to investors.

“We plan to scale the business quickly,” said Ammann.

Ammann did not specifically discuss the 2030 target, but a Cruise spokesperson confirmed that “this is where the company thinks it can be.”

For the first time, GM has detailed its previously announced plan to spend $ 35 billion on electric and autonomous vehicles through 2025.

The plan includes $ 20 billion in EV capital and engineering, $ 10 billion in battery and motor production and development, including new factories, and $ 6 billion in Cruise.

GM said that in 2023 it will launch a new hands-free system called “Ultra Cruise” capable of driving in 95% of scenarios. The system is expected to perform significantly better than its current Super Cruise system, which is exclusively available on pre-mapped split highways.

At launch, GM said, Ultra Cruise will be available on more than 2 million road miles in the United States and Canada. Super Cruise is currently available for over 200,000 miles of road.