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General Motors Co. GM 3.11%
has set a 2035 target date for the phase-out of gasoline and diesel vehicles from its showrooms around the world, among the first major automakers to set a timeline for the transition to a fully electric range.
GM’s goal, revealed Thursday in a social media post by chief executive Mary Barra, would mark a striking transition from its current business model. Vehicles that run on fossil fuels and emit pollution represent about 98% of GM’s sales today and all of its profits. Large pickup trucks and sport utility vehicles, which are the company’s biggest revenue generators, are also among its least fuel-efficient vehicles.
The country’s largest automaker in terms of sales has called the date 2035 to remove all pollution from tailpipes a vacuum. Despite this, many governments around the world, from California to Japan and the UK, have pledged to ban gasoline and diesel cars by then.
GM previously said it expected its own portfolio and the wider auto market to eventually become fully electric, but company executives had not discussed a timeline.
The automaker is making one of the auto industry’s biggest bets on electric vehicles. In November, it announced it would increase its investment in plug-in vehicles and driverless car technology by a third from previous plans, to $ 27 billion by the middle of the decade. That’s more than half of its planned capital spending during that time, the company said.
GM also said Thursday it aims to be carbon neutral by 2040, which would mean eliminating carbon emissions from all of its operations as well as the vehicles it manufactures and sells. About three-quarters of GM’s carbon output comes from the emissions produced by the cars and trucks it puts on the road.
GM shares rose sharply after his statement, rising about 4% at noon Thursday.
Dozens of new electric vehicle models are expected to hit dealerships over the next few years. We followed eight Wall Street Journal reporters in four countries to see if they and the world were ready to make the change. (Originally published January 29, 2020)
The company’s plan to go 100% electric by 2035 would mark a dramatic acceleration in electric vehicle adoption beyond what most industry forecasters expect.
Research firm LMC Automotive predicts electric vehicles will only account for 20% of global sales by 2032. RBC Capital predicts that electric vehicle penetration will be 43% by GM’s 2035 target.
Last year, around 2.2 million fully electric vehicles were sold worldwide, which is only about 3% of total sales, according to research firm EV Volumes. Analysts point to several barriers to wider adoption, including the need for more charging stations and other infrastructure. It is also questionable whether there will be a supply crisis in the raw materials necessary for the production of batteries, such as cobalt and lithium, if the adoption of electric vehicles takes off.
Today, the higher cost of plug-in cars compared to gasoline or diesel vehicles is a deterrent for many buyers. GM expects this gap to close by the middle of the decade thanks to advances in battery technology. Investing in $ 2.3 billion Ohio battery plant in joint venture with LG Chem of South Korea.
Due to the high cost of batteries, GM and other automakers focused their early efforts on luxury or sporty electric cars and trucks with higher prices to preserve their profit margins. For example, GM’s first vehicle to use its new battery technology, the GMC Hummer pickup truck, will go on sale for around $ 113,000 when it hits showrooms later this year.
“We believe that with our scale and reach, we can encourage others to do the same and have a significant impact on our industry and the economy,” Ms. Barra said in a post on LinkedIn.
GM Chief Sustainability Officer Dane Parker said Thursday that GM’s goal of going all-electric within 15 years depends in part on government incentives and other support to push consumers towards plug-in cars. .
The incentives “really help with consumer acceptance and overcome some of the initial hurdles consumers might have with the first cost, as well as things like charging infrastructure,” Parker said.
Write to Mike Colias at [email protected]
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