Will General motors continue to electrify the market?
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General Motors: To optimism!
The global Electric Vehicle (EV) market size is expected to increase from 8,151 thousand units in 2022 to 39,208 thousand units by 2030. The Popular automaker, General Motors (GM) recently announced its third-quarter earnings while delivering solid revenue. The company expects EV profits to be comparable to gas vehicles by 2025, ahead of schedule.Â
Going back to basics?
General Motors was founded in 1908 by William "Billy" Durant, who had started out as a manufacturer of horse-drawn vehicles. As environmental concerns increasingly became a concern, they started manufacturing more fuel-efficient petrol engines as well as biofuels and hybrids. In January of 2021, Mary Barra, CEO announced they would only sell zero-emission vehicles by 2035.Â
The company has been pulling out all stops to ensure they reach the set goal. From workforce training to supplier incentives, to battery technologies and recycling, to investing in charging infrastructure, and to the responsible use of water and energy. With only a small number of vehicles on U.S. roads being electric, there is much to be achieved for it to become the main choice among consumers.Â
In the recent past, the company has been making heavy investments like its $45M investment in an Indiana plant, its joint venture with LG Energy Solutions and its partnership with Utility San Diego Gas & Electric, thereby indicating its seriousness towards EVs.
Key Highlights From Q3:
Revenue of $41.9 billion
Expects $7 billion to $9 billion of cash flow for the full year
Expect delays
The company has postponed its goal of delivering a total of 400,000 electric vehicles in North America by the end of 2023 by six months. CEO Mary Barra explained during the company’s announcement of its latest quarterly results, battery production cannot be ramped up as quickly as planned.
The delay is because t it has taken longer than expected to hire and train the more than 1,000 workers needed to staff Ultium Cells’ first battery cell plant in Warren, Ohio, which began production in September. It took somewhat longer than expected to collect the battery pack, she said.
However, the company is already thinking beyond late 2023/mid-2024. General Motors intends to invest several billion dollars in growing assembly limits with regards to electric vehicles and battery cells - in Michigan and all through North America. Toward the finish of 2025, the creation limit is supposed to be more than 1,000,000 electric vehicles, including 600,000 pickup trucks.
In the shareholder letter, GM also stated that it had achieved record sales for the Bolt EV and Bolt EUV in the third quarter. In early October, General Motors announced it would expand production capacity for the two model lines from 44,000 to 70,000 units – due to high demand. However, Chevrolet had lowered the price by as much as $6,000 in the summer.
The company has proactively accomplished one more sustainability goal: They say they have figured out how to acquire sufficient sustainable power to completely supply all of its US American locations with it from 2025.
Most analysts reviewed GM’s Investor Day as constructive and positive, while some pointed out the company’s margin targets look overly optimistic.Â
Market Reaction
GM ended at $39.77, up 2.92%.
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