As the call for zero emissions gets louder, the push for electric vehicles becomes harder. The regulatory environment around emissions control is getting tighter, along with concerns over the environment, which is favoring electric vehicles. Several traditional automakers are facing a rising need to evolve and shift their focus to the development of electric vehicles.
General Motors Co. (NYSE: GM) is one among them and the company has made a significant commitment to the development of electric vehicles, hoping to go all-electric in the future. GM is investing significantly in this area and is taking several initiatives to accelerate its EV development.
On its fourth quarter earning call in February, GM said it was increasing its electric vehicles and autonomous vehicles investments to $27 billion from 2020 through 2025. This includes over $7 billion in 2021, of which $6 billion would go to EV and the rest to AV.
In 2019, GM formed Ultium Cells LLC, a joint venture with LG Energy Solution to produce battery cells for future battery electric vehicles. Last week, the company provided an update on the progress of its Ultium battery chemistry. GM’s lithium metal battery is expected to bring about an improvement in energy density and cost, which can help alleviate obstacles in affordability and range thereby paving the way for mass adoption of EVs.
In January this year, GM launched BrightDrop, a new business that will provide electric light commercial vehicles for delivery and logistics providers, particularly in the parcel and food delivery industries. GM estimates that the total market opportunity for parcel, food delivery and reverse logistics in the US will reach over $850 billion by 2025.
The company sees meaningful opportunity in this space and believes that demand for electric light commercial vehicles will witness rapid growth going forward. Based on third-party data provided by GM on its earnings call, the addressable market for electric light commercial vehicles is projected to reach $30 billion by 2025 and then double over the next five years.
GM plans to offer electric vehicles across all its brands and as part of these efforts, it rolled out the all-electric 2022 Chevrolet Bolt EUV last month. Later in the year, the company will start work on the Ultium-powered GMC HUMMER EV at its Factory ZERO plant in Detroit-Hamtramck as well as the Brightdrop EV600 commercial van. In early 2022, GM will start production of the Cadillac LYRIQ luxury EV in Tennessee.
Through these investments, the company plans to launch 30 EVs worldwide and establish a leading position in the EV market in North America. By the end of 2025, GM expects 40% of its US models to be battery EVs. By the middle of the decade, the company aims to sell at least 1 million EVs per year in North America and China, which are its two largest markets.
Shares of General Motors have gained 38% since the beginning of this year.
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