General Motors Co. in Detroit plans to double annual revenue by the end of the decade while growing its EBIT-adjusted margins as it transitions to an all-electric future, which it has announced $35 billion in investments in through 2025.
“GM’s vision of a world with zero crashes, zero emissions and zero congestion has placed us ahead of much of the competition in electrification, software-enabled services and autonomy,” says Mary Barra chair and CEO at GM.
“Our early investments in these growth trends have transformed GM from automaker to platform innovator, with customers at the center. GM will use its hardware and software platforms to innovate and improve their daily experience, leading everybody on the journey to an all-electric future.”
The plans, shared at the end of the first day of the investor meetings, detailed how GM’s hardware and software platforms will combine to create growth, expand margins, add customers, and diversify revenues.
With software and news businesses growing at nearly 50 percent compound annual growth rate (CAGR) through 2030 and the company’s core auto business driving growth, GM outlined its path to double annual revenue from a five-year average of about $140 billion by the end of the decade.
“GM is unlocking a secular growth story that is changing the trajectory of our business,” says Paul Jacobson, executive vice president and chief financial officer at GM. “Simply stated, we are at an inflection point in which we expect revenue to double by 2030 while also expanding our margins.
“We will achieve this by growing our core business of designing, building, and selling world-class ICE, electric and autonomous vehicles, growing software and services with high margins, and entering and commercializing new businesses.”
The company believes that its expansion into EVs will allow it to create higher margin software and new business platforms that can deliver margins of 12 to 14 percent by the end of the decade.
GM projects EV revenue to grow from about $10 billion in 2023 to approximately $90 billion annually by 2030 as the company launches several EVs in high volume segments. It outlined a path where connected vehicles and other news businesses drive more than $80 billion in new, incremental revenue.
The company expects strong earnings and expanded margins to allow it to fund all $9 to $10 billion of its capital spending, including Ultium joint ventures. During the first day of meetings, company leaders detailed how the Ultium and Ultifi platforms underpin the growth strategy.
GM projects annual software and services revenue opportunities in the $20 billion to $25 billion range from a projected 30 million connected vehicles by the end of the decade. OnStar is already the industry’s leading connectivity platform with more than 16 million connected vehicles on the road today, with software and services generating a projected $2 billion in annual revenue.
The company also shared the first details of Ultra Cruise, a significant next step in hands-free advanced driving-assistance technology. Cruise CEO Dan Ammann provided investors with details on Cruise’s commercialization and rapid scaling efforts as it prepares to launch the Cruise Origin AV.
Also discussed was BrightDrop, which GM expects to deliver $5 billion in revenue by mid-decade and potentially $10 billion by the end of the decade when it is planned to approach 20 percent margins.
Aisde from BrightDrop, it has a portfolio of 20 new startup businesses helping to provide a constant pipeline of innovation and potential new revenue streams. Leaders provided a preview of an all-new software-enabled startup in development, internally called Future Roads, which uses data analytics to create insights about safer roadways and communities.
At today’s meetings, investors will participate in demonstrations and in-depth discussions about the vehicles and technologies driving GM’s growth plan. In-vehicle experiences will feature the GMC Hummer EV supertruck, GM Defense’s Infantry Squad Vehicle, and the Super Cruise advanced driver-assistance system.
Technology experts will also discuss Ultra Cruise, GM’s premier hands-free advanced driver-assistance technology announced earlier today, as well as GM’s HYDROTEC fuel cell technology, software and e-commerce projects enabled by GM’s Ultifi platform and more.