Electric vehicle plant conversions, new technologies
General Motors on Wednesday ensured its pivot to a high-tech future by announcing its intention to convert more assembly plants in North America to manufacture electric vehicles by the end of the decade and to double the revenues of the company by then as it unveils more software and new electric vehicles.
GM executives are also expected to reveal new technologies, such as an advanced hands-free driving system from the automaker, as well as other EV products, including a new Chevrolet EV SUV priced at $ 30,000, during its annual Investor Day presentation, starting at 1 a.m. ET.
“Our early investments in these growth trends have transformed GM from an automaker to a platform innovator, with customers at the center,” said CEO Mary Barra. “GM will use its hardware and software platforms to innovate and improve their daily experience, guiding everyone on the path to a fully electric future. “
Barra stressed that no hourly worker will lose their job during the transition to electric and GM continues to hire salaried employees with training in digital technology and software.
“At the end of last year we hired 3,000 employees and this year alone we hired 8,000 employees, especially in the areas of technology, digital and software,” said Barra. “When we talked about achieving carbon neutrality by 2040, people said, ‘I want to be a part of it,’ and we saw the number of applications increase.”
About 100 investors are expected to attend GM Investor Day at GM’s Global Technical Center in Warren. On Thursday, investors will be at GM’s Milford Proving Grounds to see new products and technologies, including taking a ride in the 2022 GMC Hummer EV pickup and seeing the new all-electric BrightDrop delivery vans.
GM is expected to present detailed plans to investors to double annual revenues by 2030 and increase adjusted margins before interest and taxes (EBIT) as it transitions to a fully electric future.
Barra said much of this revenue growth will come from new GM businesses such as its upcoming electric vehicles, BrightDrop electric delivery trucks and OnStar Insurance, as well as future software that will unlock revenue streams through subscriptions. .
To get a feel for the revenue GM is looking to generate, the company reported 2020 revenue of $ 122.5 billion. That was down 10.8% from 2019 after GM closed all of its factories in North America last year for eight weeks at its peak. of the COVID-19 pandemic. Still, GM reported net profit of $ 6.4 billion for 2020 while its adjusted operating profit was $ 9.7 billion.
GM is shaping up to be a tech innovator, promising to invest $ 35 billion in electric and autonomous vehicles by the middle of the decade. GM will also launch 30 new electric vehicles by then.
But it has income possibilities from many other tentacles. For example, its majority-owned subsidiary, Cruise, is working on a robotaxi service with self-driving cars. Cruise CEO Dan Ammann is expected to outline the plan to bring its rideshare business to $ 50 billion in revenue as it ramps up operations. No timeline for achieving that goal is yet available, but Cruise is expected to start charging for trips next year if it gets approval from California regulators.
In a note to investors on Monday, Morgan Stanley analyst Adam Jonas wrote of Cruise: “We don’t anticipate such revenue realization until 2038 in our model, when we anticipate a cruise fleet of nearly 600,000 units with 60,000 miles per car, per year. and $ 1.50 in revenue per mile. “
GM Chairman Mark Reuss also noted that GM’s subsidiary GM Defense, which GM formed in 2017, is a significant source of income. Last year, the U.S. military awarded GM Defense its first major contract of $ 214.3 million to build the Infantry Squad Vehicle (ISV). Last month, GM Defense won a $ 36.4 million contract with the The US State Department will develop the next generation of large utility vehicles for the diplomatic security service.
A very different and cool pickup
GM’s Ultium platform that will underpin its new electric vehicles and its flexibility will allow GM to bring in high-volume inputs like a Chevrolet SUV that will cost around $ 30,000. GM said it will also bring fully electric Buick SUVs, pickup trucks from Chevrolet, GMC and Hummer, as well as Cadillac vehicles.
GM took a look on Wednesday at the Chevrolet Silverado E, the all-electric pickup it plans to debut at the Consumer Electronics Show in Las Vegas in 2022. GM showed off a photo of its all-glass roof .
The Silverado E will be built at Factory ZERO in Detroit and Hamtramck, along with the GMC Hummer EV pickup and the Hummer SUV. GM doesn’t provide exact launch dates for the Silverado E, but Reuss has said it will begin production after Hummer SUV production begins in the first quarter of 2023.
Silverado E will be positioned and marketed differently from its internal combustion Silverado, Reuss said. He said he will still be targeted at pickup customers, but that they will be a different demographic.
“The evidence of who we’re going to target will be very evident when you see the truck,” Reuss told reporters. “It’s a very innovative (approach) and it will be something that will spark people’s interest in a basis for growth. The design and proportions will be very different and very cool. “
More electric vehicle assembly plants
To bring its 30 new electric vehicles to market, Barra said more than half of GM’s assembly plants in North America and China will be able to be converted to build electric vehicles by 2030.
GM has already marked the following factories for the production of electric vehicles:
- Orion Assembly in Orion Township, which currently manufactures the Chevrolet Bolt EV and Bolt EUV.
- Factory ZERO in Detroit and Hamtramck, to build the GMC Hummer EV and Silverado E pickup and SUV.
- Spring Hill Assembly in Spring Hill, Tenn., To build the Cadillac Lyriq SUV
- CAMI in Ontario to build BrightDrop EV delivery vans.
- Ramos Arzipe Assembly in Mexico to build batteries and electrical components from the end of the year.
“We will be able to develop and convert more facilities,” said Barra. “We have the plan to get us to 2035 in the United States in terms of light vehicles.”
GM has no immediate plans to build new assembly plants, Barra said, noting that it is currently building two Ultium LLC battery plants as part of its LG Energy Solutions joint venture. One will be in Lordstown, Ohio and the other in Spring Hill, Tenn.
Barra said GM’s existing manufacturing footprint “will get us going fast, but if we need a new plant, we can do that too. But we have a trained workforce that knows how to build our vehicles, make high quality products. We want to make sure that we also take all of our staff. “
GM’s gradual transition
Barra and other executives have gradually paved the way this year for GM’s expansion beyond the simple production and sale of vehicles. In fact, two weeks ago, the Free Press reported that GM senior vice president of innovation and growth Alan Wexler said GM would become a software company that just happens to be making software. material: cars.
Wexler said GM’s new business model will use vehicles as a platform to deliver software developed by GM that provides services that can be used outside of the car. He called it a “potential game changer for providing subscription services that create recurring revenue.”
Then last week, GM introduced a new software platform it created called Ultifi, which Scott Miller, vice president of software-defined vehicles, said is a “big, big step in our software strategy.”
Similar to software on a smartphone, Ultifi will be able to provide regular updates and let customers choose from a variety of over-the-air upgrades, customization options, and apps.
On Tuesday, GM announced that software innovator Aneel Bhusri, 55, is joining its board of directors. Bhusri is the co-founder, co-CEO and president of Workday, Inc. Workday specializes in software to help managers work better with employees. GM now has 13 directors with the addition of Bhusri.
Also on Tuesday, GM announced a new Digital Business team to be led by Edward Kummer, 58, the new chief digital officer, effective October 16. Kummer to Build Digital Business and Accelerate Software Investments as Part of GM’s Decision to Offer More Software to Consumers. Kummer, who was president of Nordstrom Rack’s online operations and Nordstrom’s HauteLook brand, will report to Reuss.
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