General Motors (GM) has quite an ambitious roadmap for a bright electric future

Shares of General Motors Co. (NYSE: GM) were up 4% on Thursday. The stock has gained 34% thus far this year and 74% over the past 12 months. The company outlined a set of strategies to transform its business and drive growth over the long term at its ongoing Investor Day event. These plans have boosted a bullish sentiment around the company and the stock.

Revenue and margins

GM expects to double its annual revenues from a five-year average of about $140 billion by 2030, with software and new businesses growing at a CAGR of nearly 50% through the same period. The company plans to deliver margins of 12-14% by 2030. Margins in the core auto business are expected to expand as electric vehicles scale, battery costs decline and the company ramps up higher margin software and new business platforms.

Electric vehicles

General Motors projects EV revenue will grow from about $10 billion in 2023 to approx. $90 billion annually by 2030. The company expects EV revenues to make up 40-50% of auto sales by 2030. GM aims to launch over 30 new all-electric models and sell over 1 million EVs a year globally by 2025. The company plans to invest $35 billion in electric and autonomous vehicles through 2025.

General Motors plans to expand its manufacturing footprint to have over 50% of its factories in North America and China producing EVs by 2030. The company plans to have four plants producing batteries by 2025, bringing the capacity up to 140 GWh. GM’s Ultium-based EVs are expected to bring down battery costs by 60% in the coming years.

General Motors has entered into a supplier agreement with Wolfspeed Inc. to develop silicon carbide power device solutions for GM’s future EV programs. GM has also signed an agreement with GE Renewable Energy (NYSE: GE) to develop a supply chain of heavy and light rare earth materials and magnets, copper and electrical steel used for manufacturing of electric vehicles and renewable energy equipment.

Connected vehicles and other plans

GM sees an opportunity to drive more than $80 billion in new incremental revenue from connected vehicles and other new businesses by 2030. The company estimates annual software and services revenue opportunities in the $20-25 billion range by 2030. GM anticipates having around 30 million connected vehicles on the road in the US by the end of the decade.

With Cruise, GM has the potential to deliver annual revenue of $50 billion by the end of the decade. The company unveiled its Ultra Cruise driver assistance technology that will enable hands-free driving in 95% of all driving scenarios. Ultra Cruise will cover more than 2 million miles of road at launch in the US and Canada with the capacity to grow to more than 3.4 million miles.

BrightDrop, which is building a connected and electrified ecosystem of commercial delivery products and services, is expected to deliver $5 billion in revenue by 2025 and potentially $10 billion by 2030 when it is expected to approach 20% margins.

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