WARREN, Mich., Oct. 6, 2021 /PRNewswire/ --
- Unlocking growth in EVs through the Ultium hardware platform
and leadership in software and services through the Ultifi
platform
- Planning to double annual revenues and expand EBIT-adjusted
margins to 12 to 14 percent
- Leading the race to commercialize AVs
- Launching new businesses to add customers and diversify
revenues
- Increasing investment in EV charging
General Motors Co. (NYSE: GM) today provided a detailed roadmap
of how the company plans to double its annual revenue and expand
margins to 12 to 14 percent by 2030, as a result of GM's
transformation into a growth company driven by EVs, connected
services and new businesses.
"GM has changed the world before and we're doing it again," said
GM Chair and CEO Mary Barra. "We
have multiple drivers of long-term growth and I've never been more
confident or excited about the opportunities ahead."
GM concluded the first of two days of investor meetings by
sharing its growth plans. Leaders – many of whom recently joined GM
from other companies – detailed how GM's compelling hardware and
software platforms will combine to create growth, expand margins,
add customers and diversify revenues.
"GM is unlocking a secular growth story that is changing the
trajectory of our business," said Paul
Jacobson, executive vice president and chief financial
officer. "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."
According to Jacobson, GM's financial targets include:
- Compelling Revenue Growth with Improved Diversification:
GM outlined its path to double annual revenues from a five-year
average of about $140 billion by the
end of the decade, with software and new businesses growing at
nearly 50 percent CAGR through 2030 and the company's strong
core auto business driving growth.
- Margin Expansion: GM believes its transformation can
deliver margins of 12 to 14 percent by the end of the decade
with core auto business margins expanding as EVs scale, battery
costs decline and the company ramps up higher margin software and
new business platforms.
- Compelling Platforms: GM projects EV revenue to grow
from about $10 billion in 2023 to
approximately $90 billion annually by
2030 as the company launches several compelling EVs in high volume
segments. GM envisions a path where connected vehicles and other
new businesses drive more than $80
billion in new, incremental revenue with most of the growth
accelerating through the back half of the decade as they
scale.
- Commercialization of Cruise: With Cruise, GM
has a market-leading position in autonomous services with the
potential to deliver $50 billion in
revenue annually by the end of the decade.
- Internally Funded Capital Spending: Annual GM capital
spending, including investments in Ultium joint ventures, are
expected to be in the $9 billion to
$10 billion range in the medium-term
as the company transitions to a majority EV product portfolio. Due
to GM's strong earnings and expanding margins, the company expects
to fully fund these investments through internally generated
funds.
- Strong Cash Conversion: GM expects to achieve a cash
conversion rate of 80 to 90 percent in the latter half of the
decade.
- Strong Balance Sheet: GM's strong balance sheet will
allow the company to continue investing in our growth priorities
while maintaining an investment grade rating, which is important
for long-term growth.
Unlocking opportunities from EVs, software-enabled services
and new businesses
During the first day of presentations and discussions with
investors, GM leaders described how the company's Ultium and Ultifi
platforms underpin the company's growth strategy.
The opportunities are far ranging:
- 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. Part of GM's software and services growth comes from
OnStar Insurance, projected to have a potential revenue opportunity
of more than $6 billion annually by
the end of the decade.
- 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.
- BrightDrop, a new GM business that is building a connected and
electrified ecosystem of delivery products and services for
commercial customers, 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. BrightDrop's
purpose-built, Ultium-powered EV600 full-size electric van is
launching now and BrightDrop will add a second purpose-built
product – the smaller EV410 – in 2023.
- GM has a portfolio of 20 new startup businesses – several
already launched, others nearing launch – 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.
During today's presentations, GM also announced it is increasing
investment in charging infrastructure to nearly three quarters of a
billion dollars through 2025, covering all charging domains,
including home, workplace, and public charging throughout the U.S.
and Canada. This investment will
significantly increase access to reliable, public charging with the
superior customer experience of Ultium Charge 360.
Tomorrow, 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.
General Motors (NYSE:GM) is a global company focused on
advancing an all-electric future that is inclusive and accessible
to all. At the heart of this strategy is the Ultium battery
platform, which will power everything from mass-market to
high-performance vehicles. General Motors, its subsidiaries and its
joint venture entities sell vehicles under the Chevrolet, Buick,
GMC, Cadillac, Baojun and Wuling brands. More information on the
company and its subsidiaries, including OnStar, a global leader in
vehicle safety and security services, can be found at
https://www.gm.com.
Forward-Looking Statements
This press release and related presentations made by management
may include "forward-looking statements" within the meaning of the
U.S. federal securities laws. Forward-looking statements are any
statements other than statements of historical fact.
Forward-looking statements represent our current judgment about
possible future events and are often identified by words like
"aim," "anticipate," "appears," "approximately," "believe,"
"continue," "could," "designed," "effect," "estimate," "evaluate,"
"expect," "forecast," "goal," "initiative," "intend," "may,"
"objective," "outlook," "plan," "potential," "priorities,"
"project," "pursue," "seek," "should," "target," "when," "will,"
"would," or the negative of any of those words or similar
expressions, as well as by charts presenting aspects of our long
term plan and other projections of future performance. In making
these statements, we rely on assumptions and analysis based on our
experience and perception of historical trends, current conditions
and expected future developments as well as other factors we
consider appropriate under the circumstances. We believe these
judgments and assumptions are reasonable, but these statements are
not guarantees of any future events or financial results, and our
actual results may differ materially due to a variety of important
factors, many of which are beyond our control. These factors, which
may be revised or supplemented in subsequent reports we file with
the U.S. Securities and Exchange Commission ("SEC"), include, among
others, the following: (1) our ability to deliver new products,
services and customer experiences in response to increased
competition and changing consumer preferences in the automotive
industry; (2) our ability to timely fund and introduce new and
improved vehicle models, including electric vehicles, that are able
to attract a sufficient number of consumers; (3) the success of our
crossovers, SUVs and full-size pickup trucks; (4) our highly
competitive industry, which is characterized by excess
manufacturing capacity and the use of incentives, and the
introduction of new and improved vehicle models by our competitors;
(5) our ability to deliver a broad portfolio of electric vehicles
and drive increased consumer adoption; (6) the unique
technological, operational, regulatory and competitive risks
related to the timing and commercialization of autonomous vehicles;
(7) the ongoing COVID-19 pandemic; (8) global automobile market
sales volume, which can be volatile; (9) our significant business
in China, which is subject to
unique operational, competitive, regulatory and economic risks;
(10) our joint ventures, which we cannot operate solely for our
benefit and over which we may have limited control; (11) the
international scale and footprint of our operations, which exposes
us to a variety of unique political, economic, competitive and
regulatory risks, including the risk of changes in government
leadership and laws (including labor, tax and other laws),
political instability and economic tensions between governments and
changes in international trade policies, new barriers to entry and
changes to or withdrawals from free trade agreements, public health
crises, including the occurrence of a contagious disease or
illness, such as the COVID-19 pandemic, changes in foreign exchange
rates and interest rates, economic downturns in the countries in
which we operate, differing local product preferences and product
requirements, changes to and compliance with U.S. and foreign
countries' export controls and economic sanctions, differing labor
regulations, requirements and union relationships, differing dealer
and franchise regulations and relationships, and difficulties in
obtaining financing in foreign countries; (12) any significant
disruption, including any work stoppages, at any of our
manufacturing facilities; (13) the ability of our suppliers to
deliver parts, systems and components without disruption and at
such times to allow us to meet production schedules; (14) prices of
raw materials used by us and our suppliers; (15) our ability to
successfully and cost-effectively restructure our operations in the
U.S. and various other countries and initiate additional cost
reduction actions with minimal disruption; (16) the possibility
that competitors may independently develop products and services
similar to ours, or that our intellectual property rights are not
sufficient to prevent competitors from developing or selling those
products or services; (17) our ability to manage risks related to
security breaches and other disruptions to our information
technology systems and networked products, including connected
vehicles and in-vehicle systems; (18) our ability to comply with
increasingly complex, restrictive and punitive regulations relating
to our enterprise data practices, including the collection, use,
sharing and security of the Personal Identifiable Information of
our customers, employees, or suppliers; (19) our ability to comply
with extensive laws, regulations and policies applicable to our
operations and products, including those relating to fuel economy
and emissions and autonomous vehicles; (20) costs and risks
associated with litigation and government investigations; (21) the
costs and effect on our reputation of product safety recalls and
alleged defects in products and services; (22) any additional tax
expense or exposure; (23) our continued ability to develop captive
financing capability through GM Financial; and (24) any significant
increase in our pension funding requirements. A further list and
description of these risks, uncertainties and other factors can be
found in our 2020 Form 10-K and our subsequent filings with the
SEC.
We caution readers not to place undue reliance on
forward-looking statements. Forward-looking statements speak only
as of the date they are made, and we undertake no obligation to
update publicly or otherwise revise any forward-looking statements,
whether as a result of new information, future events or other
factors, except where we are expressly required to do so by
law.
Non-GAAP Financial Measures: See our 2020 Form 10-K
and our subsequent filings with the SEC for a description of
certain non-GAAP measures referenced in this press release and
related presentations made by management, including EBIT-adjusted,
ROIC-adjusted and adjusted automotive free cash flow, along with a
description of various uses for such measures. Our calculation of
these non-GAAP measures is set forth within these reports and may
not be comparable to similarly titled measures of other companies
due to potential differences between companies in the method of
calculation. As a result, the use of these non-GAAP measures has
limitations and should not be considered superior to, in isolation
from, or as a substitute for, related U.S. GAAP measures.
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SOURCE General Motors Co.