General Motors on Thursday said its electric vehicles could be “solidly profitable” by 2025, when it expects to be constructing 1 million of them a 12 months in North America and 1.2 million battery cells each day within the U.S.
GM CFO Paul Jacobson told reporters ahead of the corporate’s investor day in Latest York that the automaker will maintain North American profit margins of 8 to 10 percent in the approaching years and that EV margins will nearly match those of internal combustion vehicles with the good thing about additional scale and forthcoming federal tax credits.
The corporate is projecting low- to mid-single-digit margins on EVs in 2025, including emissions credits and software and aftersales revenue. GM expects to generate greater than $50 billion in revenue from EVs and $225 billion in total revenue in 2025. Its global revenue last 12 months was $127 billion.
“This is actually just the beginning for us,” Jacobson said. “And when you concentrate on the EV tax credits on top of it — we’ll discuss $3,500 to $5,500 per vehicle, or about 5 to 7 points of margin under the EV program, getting us to a position where we consider we’ll have ICE-like margins within the 2025 time period.”
GM has committed $35 billion toward electric and autonomous vehicle development through 2025 and goals to make its light-duty vehicle portfolio emissions-free in North America by 2035. The automaker is constructing 4 U.S. plants to provide its proprietary Ultium batteries in a three way partnership with LG Energy Solution and has laid out plans to have five North American plants assembling EVs as of 2025.
“GM’s ability to grow EV sales is the payoff for a few years of investment in R&D, design, engineering, manufacturing, our supply chain and a recent EV customer experience that’s designed to be one of the best within the industry,” GM CEO Mary Barra said in a press release Thursday. “Our multi-brand, multi-segment, multi-price point EV strategy gives us incredible leverage to grow revenue and market share, and we consider our Ultium platform and vertical integration will allow us to repeatedly improve battery performance and costs.”
Jacobson said GM’s annual capital spending through 2025 will range from $11 billion to $13 billion, a mirrored image of the automaker’s aggressive plans to extend EV production capability, he said.
“We consider the EV market will likely be even greater by 2025 than the 17 percent share of industry that a variety of third-party forecasters are predicting,” he told reporters. “And we’re going to do this with great design, quality, performance and more price points than anybody else can offer. And that is really built upon the muse of the pliability of the Ultium program.”
GM said its U.S. battery cell capability should top 160 gigawatt-hours by the center of the last decade. At the identical time, its battery cell costs should decline from about $87 per kilowatt-hour in 2025 to lower than $70 per kWh within the second half of this decade, Jacobson said.
The corporate projected that total revenue will increase 12 percent annually through 2025, with growth coming not only from EVs but additionally from software, its BrightDrop electric delivery van unit and Cruise, the self-driving vehicle company majority-owned by GM, Jacobson said.